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GM files for bankruptcy

 

Barack Obama announces a US government takeover of the nation's largest car company after it filed a Chapter 11 bankruptcy petition

The President unveiled the plan to invest US$50 billion of taxpayer's money to fund General Motor's revival as a "competitive New GM".

GM has debts of US$172.8bn (NZ$270bn) and assets valued at just US$82.3bn, according to documents filed at the court. The company has been kept afloat since December by loans from the US government, which now total US$20bn.

Holden New Zealand says its operations are unchanged by the announcement from its parent company, and it will be part of the New GM.

“Operations at Holden are unchanged in Australia and New Zealand and we expect it to remain that way,” Holden Chairman and Managing Director, Mark Reuss, said today.

“GM has clearly stated that all of its businesses in the Asia Pacific region – and that includes Holden – continue normal operations and are not directly impacted by this process in the US.

“Holden is a subsidiary of GM but we are a corporate entity in our own right – an independent company under Australian law.

“Beyond that, GM has indicated that Holden will be an important part of the New GM."

Reuss says Holden will continue to focus on product programs and activities, including technology improvements to the Commodore range, launching the Holden Cruze this month, and the introduction of locally-built fuel efficient, four cylinder small car next year.

“We don’t anticipate this decision will have any direct impact on Holden’s workforce, dealers, or suppliers.

“Holden customer warranties are not affected and we continue to deliver the sales and service experience that our customers expect.

Unlike court-controlled processes in many other countries, US chapter 11 allows GM to deal with the financial issues that have built up over many years and for New GM to emerge as a healthier business, better able to deal with the challenges of today and tomorrow, Reuss says.

Pending approvals, the New GM is expected to launch in about 60 to 90 days as a separate and independent company from the current GM, with two advantages: it will be built from only GM’s best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before.

GM has previously indicated it is negotiating with prospective buyers for the Saab and Hummer brands. GM is working closely with dealers, including those in Australia and New Zealand, to continue delivering vehicles and maintaining aftersales and servicing requirements, says Reuss.


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