Tuesday, March 31, 2009


In addition to my previous post on GM's restructuring process, read this partial list of issues and stakeholders that need to be addressed in GM's and Chrysler's plans to be submitted to the government tomorrow. Keep these in mind as you read and listen to the inevitable commentary and debate.

Here are some of the stakeholders whose claims and interests must be altered:

The US Government's previous loans
Senior bank lenders
Mortgage lenders who hold mortgages on various plants and locations

Unsecured bondholders
Landlords who hold leases on various plants and locations
Suppliers and vendors

Joint venture and alliance partners
Local, county and state entities relying on revenue for their bond obligations as well as taxes
Current employees
Job bank employees

Retired employees
Various businesses and individuals that support the automakers and employees with non-auto goods and services.

Here is a partial list of the issues:

The likely real annual auto demand
Too many brands
Too many dealers
Too many plants
Too many non-plant facilities
Too many employees, management, union and other

How much more loans are required? Their terms and conditions?
Treatment of the senior bank lenders claims vis a vis the government loans?
The unsecured bondholders debt for equity swaps? What about those that don't agree?

Treatment of undersecured mortgage lenders?
Treatment of leases underlying facilities that need to be abandoned?
State franchise laws which require substantial payments to closed dealers?

Various contracts with suppliers, vendors and joint venture/alliance partners
Portion of retiree benefits to be shifted to the PBGC

This is just a partial list. I just want us to understand there are numerous stakeholders and issues that have to be addressed. Keep these in mind as you listen to the proposals.

Are they all addressed? What are the other issues? Who are the other stakeholders?

More to come.

Cheers, Mike

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