General Motors is on THE BRINK of Bankruptcy
General Motors has warned that billions of dollars in government aid may not prevent it from running out of cash if vehicle sales do not improve soon.
In a regulatory filing, GM, which was overtaken by Toyota as the worldâ€™s biggest carmaker last year, underlined the magnitude of its liquidity crisis by warning that it cannot afford to repay a $1bn bond maturing on June 1. The bond is part of $27bn in unsecured debt that GM is seeking to restructure through a debt-for-equity exchange.
Bondholdersâ€™ advisers were due to meet on Thursday afternoon with the US government task force overseeing GMâ€™s restructuring. They were ex-pected to ask for a guarantee on new securities that GM would issue as part of its debt restructuring.
GMâ€™s filing repeatedly raises the spectre of a possible bankruptcy filing, in spite of warnings that such a move would be costly and could do irreparable harm to its image in the marketplace.
Looks like GM will go BK and have to restructure its business operations, including its onerous union labor contracts.
This is unfortunate but may be what is required to right the automaker.
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And now what? Mr. President, now what?
And what about the bailout they already swallowed? Who’s going to pay that back? That’s our money.