General Motors Corporation (GM) is a U.S. automaker based in Detroit, Michigan. It is the world's second-largest after Toyota, ranked by 2008 global unit sales. GM was the global sales leader for 77 consecutive calendar years from 1931 to 2007. It manufactures cars and trucks in 34 countries. GM employs 244,500 people around the world, and sells and services vehicles in some 140 countries. In 2008, 8.35 million GM cars and trucks were sold globally under the following brands: Buick, Cadillac, Chevrolet, GMC, GM Daewoo, Opel, Vauxhall, Holden, Pontiac, Saab, Saturn and Wuling.In late 2008 GM, along with Chrysler, received loans from the United States, Canada, and Ontario governments to avoid bankruptcy resulting from the late-2000s recession, record oil prices, mismanagement, and fierce competition On February 20, 2009, GM's Saab division filed for reorganization in a Swedish court after being denied loans from the Swedish government. On April 27, 2009, amid ongoing financial problems and restructuring efforts, GM announced that it would phase out the Pontiac brand by the end of 2010 and focus on four brands in North America: Chevrolet, Cadillac, Buick, and GMC. It also announced that the resolution (sale) of its Hummer, Saab, and Saturn brands would take place by the end of 2009.GM had previously eliminated the Oldsmobile brand earlier in the decade for similar reasons.
As of April 24, 2009 (2009 -04-24), GM has received US$15.4 billion in loans from the US Treasury Department under the Troubled Assets Relief Program (TARP). GMAC, a financing company held 49% by GM, has received US$5 billion in loans under the same program, while GM has received an additional US$1 billion loan to buy more equity in GMAC. General Motors Canada, 100% owned by GM,has received a combined loan commitment of C$3 billion from the Canadian and Ontario governments.
General Motors filed for a government-assisted Chapter 11 bankruptcy protection on June 1, 2009, with a plan to re-emerge as a smaller and less debt-burdened organization in several months.The chapter 11 petition was filed in the federal court in Manhattan, New York. The filing reported US$82.29 billion in assets and US$172.81 billion in debt. As ranked by total assets, the bankruptcy is the fourth-largest in U.S. history, following Lehman Brothers Holdings Inc., Washington Mutual and WorldCom Inc. The Renaissance Center in Detroit, Michigan, is General Motors' world headquarters.
General Motors is structured into the following operating groups:
Group Number of Employees as of September 2008GMAP (GM Asia-Pacific) 35,000 GME (GM Europe) 56,000 GM LAAM (GM Latin America, Africa and the Middle East) 36,000 GMNA (GM North America) 123,000 GMAC (GM Acceptance Corporation – finance and insurance services) SPO (Service, Parts and Operations) Other operations 2,000 Total number of employees 252,000
2008/2009 decline timing GM and Chrysler receive Canadian loans amid US restructuring ultimata October 10, 2008: GM considered exchanging its remaining 49% stake in GMAC to Cerberus Capital Management for Chrysler LLC, potentially merging two of Detroit's "Big Three" automakers. Acquisition talks involving Chrysler were cancelled, however, before November 7, 2008, as part of a broader response to the increasing urgency of GM's own cash flow problems. That was a result of Chrysler's senior bank debt currently trading at less than 50 cents on the dollar and because Chrysler's other owner – Daimler, formerly DaimlerChrysler – recently revalued its 19.9% Chrysler stake down to zero, which may or may not reflect its value in a potential sale.
December 12, 2008: General Motors stated that it was nearly out of cash, and may not survive past 2009. The U.S. Senate voted and strongly opposed any source of government assistance through a bailout bridge loan (originally worth $14 billion in emergency aid) which was aimed toward helping the struggling Big Three automakers financially, despite strong support from President George W. Bush and President-elect Barack Obama, along with some mild support from the Democratic and Republican political parties. Prior to the U.S. Senate's announcement, General Motors announced that it had hired several lawyers to discuss the possibility of filing for bankruptcy, with Chapter 11 bankruptcy being one of the options discussed. GM stated that "all options are on the table" for the company. Chrysler LLC, which is owned by Cerberus Capital Management, in a similar financial situation, warned that it, too, was nearly out of cash and might not survive much longer.
December 18, 2008: President Bush announced that an "orderly" bankruptcy was one option being considered for both General Motors and Cerberus-owned Chrysler LLC. Sources said that setting up this type of "orderly" bankruptcy would be complicated because it would not only involve talks with the automakers, but also the unions and other stakeholders would have to be involved. December 19, 2008: President Bush approved a bailout plan and gave General Motors and Chrysler $13.4 billion in financing from TARP (Troubled Assets Relief Program) funds, as well as $4 billion to be "withdrawn later."
As of February 14, 2009: General Motors was considering filing for Chapter 11 bankruptcy under a plan that would assemble all of their viable assets, including some U.S. brands and international operations, into a new company.Less than a week later, its Saab subsidiary filed for bankruptcy protection in Sweden. March 5, 2009: GM's independent public accounting firm (Deloitte & Touche) issued a qualified opinion as part of GM's 2008 annual report that stated "[these conditions] raise substantial doubt about its ability to continue as a going concern." A qualified going concern audit letter like this is only issued by the auditors when the company is in extreme financial distress and it is likely that it may file for bankruptcy protection.
March 12, 2009: GM's CFO Ray Young said that it would not need the requested $2B in March noting that the cost-cutting measures are starting to take hold.
March 29, 2009: GM's Chairman and CEO, Rick Wagoner, agreed to immediately resign his position as part of an Obama administration automotive restructuring
plan. Wagoner was replaced by Fritz Henderson. In announcing that plan, on March 30, 2009, President Obama stated that both GM and Chrysler may need to use "our bankruptcy code as a mechanism to help them restructure quickly and emerge stronger He also announced that the warranties on cars made by these companies would be guaranteed by the U.S. Government.
March 31, 2009: President Barack Obama announced that he would give GM 60 additional days to try and restructure their company and prove their viability. If they succeeded, Washington would provide General Motors with additional bridge loans. However, if GM could meet the requirements set by the White House, a prepackaged bankruptcy is probable. President Obama reiterated that GM will be part of the future even if bankruptcy is necessary.
April 22, 2009: GM stated that it will not be able to make their paymentJune 1, 2009 debt payment.
April 24, 2009: GM announced that they will be scrapping the Pontiac brand in an effort to invest more money into their major brands (Buick, Cadillac, Chevrolet, and GMC). May 4, 2009: German Economy Minister Karl-Theodor zu Guttenberg said Fiat (among others)might be interested in the GM European unit.
June 1, 2009: GM filed for Chapter 11 Bankruptcy,the fourth largest filing in the United States history after Lehman Brothers, Washington Mutual, and Worldcom.Bankruptcy filings in June
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