UPDATE at the bottom
A US judge has approved the sale of GM’s good assets (sic) to the new GM, allowing them to exit bankruptcy proceedings a fair bit earlier than expected.
From the press release:
NEW YORK – General Motors achieved another milestone in its reinvention last night when Judge Robert E. Gerber of the U.S. Bankruptcy Court for the Southern District of New York approved the sale of substantially all of General Motors Corporation’s assets to NGMCO, Inc., an entity funded by the U.S. Department of the Treasury. In connection with the closing of the sale transaction, NGMCO, Inc. will change its name to General Motors Company and continue to operate under GM’s historic corporate and sub brands. The approval marks another step toward the launch of an independent new GM.
The new company will acquire GM’s strongest operations and will have a competitive operating cost structure, partly as a result of recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW).
The new GM will have lower leverage and a stronger balance sheet, which when combined with a lower break-even point, will allow it to reduce its risk, operate profitably at much lower volume levels, and to reinvest in the business in the key areas of advanced technology and product development. GM’s subsidiaries outside the United States will be acquired by the new company and are expected to continue to operate without interruption.
That last sentence is interesting in that the press release doesn’t mention which subsidiaries will be acquired by the new company. We’re pretty sure Daewoo and Holden will be part of the new GM, but what of Opel and Saab? It’s assumed they’re part of the old GM, which according to Automotive News, is being liquidated.
Under the deal, ‘New GM’ will operate the best parts of the old company, including its Chevrolet and Cadillac brands, with a less expensive workforce, smaller dealer network, and much less debt. The rest of the company will be liquidated.
It’s an interesting aside – who’s selling Saab? New GM or old GM? It’s always been assumed it would be Old GM, but it’s not being liquidated and I assume all future dealings will be with new GM so maybe it’s going as part of the new deal?
Either way, Saab will be sold.
And that’s the news we’ll be waiting for later this week. Will Koenigsegg be able to sweet-talk the Swedish government into loan guarantees? Will there come a time in the next five days when GM are led to believe that their preferred partner can’t close the Saab transaction, forcing them to open the bidding up once again?
The game isn’t over yet, folks.
And geez it’s been nice to not talk about General Motors for a few weeks. A sign for the future.
Just as I was finishing this post and hitting ‘save’, the following was posted in comments by Börjesson:
Göteborgs-Posten reports that SAAB surprisingly ended up in the “healthy” part of new GM.
So it seems the new-GM theory, above, is true.
Still to be sold, but it’s nice to beat the assumption that Saab was one their crappy assets.