GM bankruptcy is as certain that if it happens it may not bring any surprises to buyers, sellers or the analysts. However, GM may not file for bankruptcy this week.
According to Reuters, a source familiar with the matter told the agency that there is no expectation that General Motors may file for bankruptcy this week. However, if there is any move in this direction, it may come around June 1 or after it. That is the deadline that the government has set for the car maker and its stakeholders to reach a restructuring settlement agreement.
First, why is the General Motors bankruptcy talk increasing? It's because the automaker failed to reach an agreement with its bond holders who refused to reach a deal. General Motors says not enough of its bond holders agreed to swam bonds with a company stock. The result is that the car maker is almost certainly headed toward bankruptcy protection.
While Chrysler is fighting for a way out form its Chapter 11 bankruptcy the question in many minds is what would the the GM bankruptcy ramifications for the parties involved. David Cox, who is a local auto dealer and heads up the Indiana chapter of the National Automobile Dealers' Association, says he does not think there is any difference in a bankruptcy or non bankruptcy to dealers, to public or to anybody that is buying General Motors' cars. He says restructuring at the corporate level should not effect business at the local level. The cars will still be at the dealerships, new cars that are in the pipeline will come and whoever is going to buy a GM car will buy a GM car. The sales will not be effected either.
The only think that may happen to a dealers is that they may get dealys in the payment from time to time. But others, while agree with this view, say GM is a very large company and you never know if or when the surprise will come.
Recently General Motors announced the closing of nearly 1200 GM dealerships around the nation. This dramatic development in the U.S. car industry came after GM's rival Chrysler announced its closing of the 25 percent of its 3,189 dealerships.
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