On Friday July 10, 2009 a new company GMGMQ.PK arose from the GM bankruptcy proceedings with:
- U.S. Treasury owning 60.8%
- The Canadian and Ontario governments owning 11.7%
- The Union Retirees Healthcare Trust (VEBA) owning 17.5%
- Current Debt Holders could get as much as 10%
Below is the comparison from the OLD GM to the NEW GM.
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OLD GM
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NEW GM
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Debt
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172.81 billion
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11 billion
(Another 9 billion in preferred shares)
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Brands
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Chevrolet, Cadillac, Buick, GMC, Pontiac, Saab, Saturn and Hummer
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Chevrolet, Cadillac, Buick and GMC
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Employees
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91,000 (end of 2008)
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64,000
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Dealerships
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6,000 (end of 2008)
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3,600 (end of 2010)
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US Factories
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47
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34 (end of 2010)
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Through the bankruptcy proceedings GM received about $50 billion in tax payer funds, but now GM had its first profitable quarter in a while last year and had an Initial Public Offering (IPO) of the new company at $33 per share in Nov 2010. Although the share price went up to $40/share, it has since dropped to under $30/share. The US Treasury is considering selling its 500 million shares at a loss because in order to break even the sell price needs to be $53/share.
On the car front, although the Chevrolet Volt, GM’s electric hybrid vehicle, will cost nearly $40,000/unit and only expected to sell 10,000 units this year GM plans to double car sales in China by 2015.
In 2010, GM sold 2.35 million vehicles in China. They plan to sell 5 million vehicles in China by 2015.
China’s auto market is now the world’s largest with 13.7 million vehicles being purchased in 2010 compared to the 10-11 million vehicles being sold in the US in 2010.
GM also plans to roll out 60 new and upgraded models in China in the next five years, almost half of them Chevrolets and Buicks, GM China President Kevin Wale said.
Although the US tax payers may not recoup the $50 billion provided to GM nor the tens of billions in tax exemptions for the next 20 years, the future of GM is very, very bright.
