Official: GM takes Chapter 11
BY RON HAMMERTON | 2nd Jun 2009
But GM Holden says the move will have no direct impact on its Australian design, engineering and manufacturing operations, and no local jobs will be lost.
Holden also says it will be part of the “New GM” – the post-bankruptcy company that is expected to emerge with the aid of $US15 billion bankruptcy financing from the US government.
In the US, GM’s bankruptcy filing came on the same day as a US bankruptcy judge approved the sale of most of Chrysler’s assets to a group led by Fiat SpA (see separate story).
While the GM restructuring makes the US government the biggest shareholder under a debt-for-equity arrangement, President Obama said GM executives would be left to run the company that will emerge from bankruptcy in 60 to 90 days.
"Our goal is to get GM back on its feet, take a hands-off approach and get out quickly," he said in a televised announcement.
The bankruptcy filing – announced by GM CEO Fritz Henderson in New York overnight – is the largest by a manufacturing company in US history.
GM said it would not rush into dealership terminations under bankruptcy protection, instead sticking with the 18-month grace period for dealers who have already received termination letters.
It also has identified 14 plants to be closed or idled in North America, including four assembly plants.
In Australia, Holden chairman and managing director Mark Reuss said that all GM business in Asia-Pacific – including GM Holden – would not be directly affected by the bankruptcy filing in the US Federal Court.
“Holden is a subsidiary of GM, but we are a corporate entity in our own right – an independent company under Australian law,” he said.
“Beyond that, Holden will be an important part of the New GM.”
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GM Holden should be safe, says Reuss