Financial Dispatch: GM out of bankruptcy
[cnn-photo-caption image=http://i2.cdn.turner.com/cnn/2009/BUSINESS/07/06/gm/art.gm.afp.jpg caption="A GM dealership in Shanghai, China"]
Andrew Torgan
CNN Financial News Producer
After a six-week trip through bankruptcy, the “new” General Motors came into the world today - owned by the government and free of tens of billions in debt and minus its unaffordable brands, dealerships and plants.
The sale of the valuable assets of the old company to the new GM was completed this morning.
"This is an exciting day for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers," GM CEO Fritz Henderson said.
"We deeply appreciate the support we've received. We'll work hard to repay the trust, and the money, that so many have invested in GM," Henderson added.
But he said he couldn't promise that GM would repay the $50 billion the government has already given or promised to GM.
And while there are a lot of changes at the "new" General Motors, at least two things will stay the same: its name and its iconic blue logo.
AIG bonus backlash continues
Bailed-out insurance giant AIG is back in the crosshairs today over its plans to pay $2.4 million in executive bonuses next week.
But the larger issue is how AIG will deal with its obligation to pay roughly $235 million still owed to employees of its crippled financial products division.
The bonus issue resurfaced late Thursday after The Washington Post reported that AIG was seeking the government's consent to make a scheduled performance bonus payment of $2.4 million to 43 of its top-ranking executives.
But there's still the $235 million in retention bonuses owed to about 400 employees of AIG's Financial Products Division that the company has to deal with. A public and political firestorm broke out in March when it was revealed that AIG had paid out $165 million of retention bonuses to those employees.
Banks could shortchange taxpayers
The Treasury Department is at risk of short-changing taxpayers by not collecting enough from banks trying to get out from under the government's thumb, according to a panel that watches over the federal bailout program.
The Congressional Oversight Panel warns that Treasury must drive a hard bargain with banks exiting the Troubled Asset Relief Program (or TARP) in a report released today that was unanimously approved by the entire five-member panel.
TARP is the $700 billion bailout enacted last October that Treasury has used to infuse capital into financial firms through complicated loans.
Geithner proposes derivatives crackdown
Treasury Secretary Timothy Geithner today proposed clamping down on dealers in freewheeling markets for little-understood derivatives that helped create a crisis in U.S. and world financial markets.
In testimony at a joint hearing by two congressional panels that will play a role in writing legislation on derivatives, Geithner set out proposals that would make big dealers like Citigroup, Goldman Sachs and JPMorgan Chase subject to much stronger supervision than was the case in the past.
Gas prices down for 19th straight day
Gas prices dropped 1.5 cents overnight to $2.565 - the 19th straight day of declines.
In the last 19 days, the average price has decreased 12.8 cents, or 4.75 percent. The average price of a gallon of gas is also down $1.549, or 37.6 percent, from the record high price of $4.114 that AAA reported on July 17, 2008.
The highest gas prices are in Hawaii ($3.292). The cheapest are in Missouri ($2.329).
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Filed under: Economy • Finance • General Motors |
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out of bankruptcy? huh? there is a bill to be paid!
GM that is out of bankruptcy, has fewer jobs, fewer brands, less production, less revenue.
Nothing recalls the old GM, that already it was the largest company in the worl. But it also leaves less debt. GM will have chance if, in recovery, seeking the path of sustainable products.
Great news about "GM",but the one caveat is the Hy-Brid,and EV rollout? Their talking years',not a year+,which is disconcerting,to say the least. They have a competitive advantage,having been the original car manufacturers a decade ago (infrastructure/standards/etc.,must be established),but let's get real folks,they have hood-winked the public in the past (the government being the largest shareholder should certainly hold their hands to the fire,after all it's our $50bn.,isn't it?)! Treasury Secretary Geithner talk about more stringent oversite on dirivatives is fine,so as the "Fox isn't guarding the Chicken Co-up once again",as they do run in circles? Finally,I like to say/predict that AIG will soon file for bankruptcy! Why? They are already selling off valuable assests at fire-sale prices to close associates they've done business with in the past ,and many of their big-money (rain-makers) are already in place to run the defunct newly-branded companies once owned by the company/government,while the waste will be laid at the taxpayers feet. These are foster children, finally finding their glich in the scrammbled business world of today,always at the tax-payers expense,...but always as the underbelly of a diabolical "Wall Street Corporate Greed",a creed of deception! But as long as they support "K-Street",who cares,...?