GM bankruptcy could spread overseas
BY IAN PORTER | 12th May 2009
The decision is a potential blow for GM Holden, which is already set to lose its Pontiac export deal to the US.
However, Mr Henderson said bankruptcy for subsidiaries was not the preferred course of action, and that analysis was being done on a country-by-country basis.
GM Holden spokesman Scott Whiffin said yesterday there was no suggestion Holden was going to go bankrupt.
“I actually don’t think there is anything new in what Mr Henderson said,” he said, adding that there was nothing unusual about the analysis being done on a country-by-country basis.
“There’s no question these are tough, interesting times for the global automotive industry, but we, Holden, are planning to be here for a long time yet.” Mr Henderson was giving the second in a promised series of regular press conferences, although he started by saying he did not have anything specific to announce.
In answer to a reporter's question, he said it might not be only the US company that was put into Chapter 11 bankruptcy, which he said was still the most likely course of events in the US.
“Given the objectives we have set for ourselves, it is more probable we will need to accomplish our goals in a bankruptcy,” he said.
Mr Henderson said it was still not clear if all or some of the company’s international operations would also have to be put into bankruptcy.
“Work continues on that front on a country by country basis,” he said.
“It is not a foregone conclusion a US filing would result in filings in other places. As a general principle, I think it would be our preference to avoid that.
“But in a number of cases it might be necessary.
“I’ll have more to say when we get to that point about what we need to do. But at this point the analysis is being done country by country.”
Asked about disquiet in the United Auto Workers (UAW) union about a prospective doubling in the number of vehicles imported for sale in the US, Mr Henderson said the company was in discussion with the UAW.
“Our (restructuring) plan had, by 2014, about 7.5 per cent of production for US sales outside North America. That’s about 235,000 vehicles,” he said, adding that it would be spread over six products.
“This is something we would want to have a discussion with them about, because in general, as a matter of policy, we have the philosophy of building where we sell.
“Not only do we think it is the right thing to do, it’s the most profitable thing to do, historically, so we would anticipate having a dialogue about the union concerns that are on the table.” The planned closure of the Pontiac brand in the US will spell the end of Holden’s US export program, which saw Commodores being shipped to the US as Pontiac G8 sedans.
Last week, Mr Henderson said no American-built Pontiacs would be rebadged for sale in any of the continuing GM brands – Chevrolet, Buick, Cadillac and GMC.
It is not clear if that policy would also apply to the Commodore, which has recently been touted as a possible export candidate to the US as a police squad car.
The stated preference to build where the vehicles are sold might also rule out possible exports of the Commodore utility to the US as a small GMC pick-up.
Mr Henderson said the sale of the Hummer operation had run over time, although GM was still negotiating with two parties.
“We had three offers for Hummer and we are negotiating with two parties trying to reach acceptable terms,” Mr Henderson said.
He had wanted to have Hummer sold by the end of April, but said last night he now expected talks to be concluded by the end of May.
A number of parties, all Swedish, had expressed interest in Saab. However, Mr Henderson said that the process was being run by Saab and he had no direct knowledge of the talks.
On the sale of Opel/Vauxhall, Mr Henderson appeared to rule out the possibility that a new partner in the business, such as Fiat, might choose to close down Vauxhall.
“I am not going to talk about the discussions, but I will say that our business in the UK is our largest in Europe,” he said.
“Vauxhall dealers do a fantastic job and Vauxhall is an integrated and crucial part of our business.” Mr Henderson said GM was talking with several interested parties about Opel and was hoping to have an idea about the form of any agreement by the end of May.
He indicated that GM would retain a stake of some kind, but acknowledged that Opel needed fresh capital, and quickly.
“With respect to the German government, we have a need for funding, actually, in our European business.
“That’s important and urgent and the German government hasn’t indicated an interest in running our business but, on the other hand, we do need their support in terms of funding.
“To the extent that we will have a partner in our European business, and we anticipate we will, we need to respect the legitimate interests of that partner, whichever that partner is.
“I think there will be substantial benefits from running the business on a global basis. On the other hand, you need to respect the rights of the partner in any such agreement.” He pointed to Daewoo in Korea, where GM a little more than 50 per cent of the capital, and the joint venture in China with Shanghai Automotive, as examples of where GM has had success with partnerships.
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