 GM might need $30 billion loan
GM Could Need $30 Billion in U.S. Loans
Date posted: 02-17-2009
DETROIT — General Motors, as part of its viability plan filed with the U.S. Treasury Department Tuesday, said it may need a total of as much as $30 billion in government loans, more than double its original request.
For its part, GM said it had accelerated its cost-cutting plans to include a reduction of its global workforce by 47,000 people this year, and will close another five U.S. plants by 2012. GM will either sell or wind down Hummer by March 31. GM is talking to potential buyers but if it doesn't make a deal, it will close down Hummer — and it won't take long to do so, GM execs said.
Similarly, Saab is up for sale. GM has capped how much it will invest in Saab and is negotiating with the Swedish government to help keep the Swedish brand afloat until it can be sold. If it can't be sold, Saab likely would be forced to file for bankruptcy.
And Saturn — GM will wind it down after its current product line comes to the end of its lifecycle unless a buyer is found or Saturn dealers themselves decide to take it over. Indeed, Saturn dealers are considering just that, and vehicles from India and/or China could eventually find their way to Saturn showrooms if that happens.
At the same time, GM said it continues to negotiate with its bondholders and unions for concessions.
If this doesn't work, GM has analyzed three bankruptcy scenarios, with price tags of as much as $100 billion, including more taxpayer money. But the company emphasizes that bankruptcy is a last resort.
If you pay U.S. taxes, you're now a GM shareholder, getting in deeper by the day. — Michelle Krebs, Editor, AutoObserver.com
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