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c0ltran3 · 08-02-2009, 21:19

General Motors Said to Plan Negotiations With Bondholders, UAW

By Serena Saitto, Zachary R. Mider and Jeff Green
Feb. 8 (Bloomberg) -- General Motors Corp. executives, advisers, bondholders and union officials plan to meet this week in Detroit to negotiate the government-ordered debt restructuring of the automaker, two people close to the talks said.
The discussions, which are said to include all global debt holders, follow previous informal talks as part of the Detroit automaker’s plan to reduce $27.5 billion in unsecured debt to about $9.2 billion by swapping for equity, the people said. They asked not to be named because the meetings, scheduled for tomorrow and Feb. 10, are private.
GM is under pressure to show progress in negotiations with bondholders and the United Auto Workers ahead of a Feb. 17 status report to the U.S. Treasury as part of an agreement to keep $13.4 billion in loans the automaker needs to stay out of bankruptcy. GM has pledged to reduce dealers and brands.
“As we continue our restructuring and work toward meeting the terms of the term loans, GM is providing certain necessary information to key stakeholders’ advisers so they can appropriately evaluate the decisions they will have to make,” GM spokeswoman Renee Rashid-Merem said.
“Given the confidential nature of those discussions, we won’t discuss any specifics.”
UAW spokesman Roger Kerson didn’t immediately return a phone call seeking comment.
‘Serious Blow’
Pacific Investments Management Co., manager of the world’s biggest bond fund, resigned from the bondholder committee last month, Bill Gross, Pimco’s co-chief investment officer, said Jan. 20. The defection of Pimco was a “serious blow” to GM’s exchange offer, KDP Investment Advisors Inc. said at the time.
The 10-member bondholder committee includes San Mateo, California based Franklin Resources Inc. and Fidelity Investments of Boston, a person with knowledge of the situation said last month.
If GM can’t convince the bondholders and UAW to agree to new terms, the government could force GM to return the loans or convert them into funding for a government-backed bankruptcy. GM has said a bankruptcy may lead to liquidation because it would further erode sales, which fell 49 percent in its home market in January.
GM also is required to reduce UAW labor costs to close to parity with foreign automakers with operations in the U.S., such as Toyota Motor Corp. and in a separate equity swap, reduce obligations to a union-retiree health-care fund by 50 percent to $10.2 billion.
UAW President Ron Gettelfinger has said he is willing to make concessions if other stakeholders, including bondholders and GM executives also make concessions.
Job Cuts
GM is also readying a plan this month to cut thousands of salaried jobs, people familiar with those plans said. Those cuts may help with efforts to get additional union concessions, the people said. The job losses may be similar in magnitude to more than 5,000 eliminated last year, the people said.
GM is offering retirement incentives to most of its 62,000 UAW members that include $20,000 cash and a $25,000 voucher for a new car for workers willing to retire or quit. About 22,000 of the GM workers are eligible to retire.
GM would like to get more than 10,000 union workers to leave and is expecting at least half that many to accept, one person said. Workers have until March 24 to decide.
The survival strategy also includes a plan for GM to sell, drop or de-emphasize half of its brands and to cull 1,700 U.S. dealers from its 6,400 total.
Chrysler Plan
By Feb. 17 GM, along with Chrysler LLC, which borrowed $4 billion, must outline its plan for long-term viability, competitiveness and energy efficiency. The plan must demonstration how the automakers will repay the loans, restructure their business and ensure a positive value for the automakers in the future.
The plan must show monthly detail through 2010 and annual projected financial results through 2014.
By March 31, GM must have union approval for any contract changes as well as an agreement to cut the costs of the union retiree health-care fund. The automaker must also have begun the debt exchange offer with bondholders.
To contact the reporters on this story: Zachary R. Mider in New York at zmider1@bloomberg.net; Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

08-02-2009, 21:19	#118 (permalink)
c0ltran3 Utente Senior Data registrazione: Jan 2009 Messaggi: 393	General Motors Said to Plan Negotiations With Bondholders, UAW By Serena Saitto, Zachary R. Mider and Jeff Green Feb. 8 (Bloomberg) -- General Motors Corp. executives, advisers, bondholders and union officials plan to meet this week in Detroit to negotiate the government-ordered debt restructuring of the automaker, two people close to the talks said. The discussions, which are said to include all global debt holders, follow previous informal talks as part of the Detroit automaker’s plan to reduce $27.5 billion in unsecured debt to about $9.2 billion by swapping for equity, the people said. They asked not to be named because the meetings, scheduled for tomorrow and Feb. 10, are private. GM is under pressure to show progress in negotiations with bondholders and the United Auto Workers ahead of a Feb. 17 status report to the U.S. Treasury as part of an agreement to keep $13.4 billion in loans the automaker needs to stay out of bankruptcy. GM has pledged to reduce dealers and brands. “As we continue our restructuring and work toward meeting the terms of the term loans, GM is providing certain necessary information to key stakeholders’ advisers so they can appropriately evaluate the decisions they will have to make,” GM spokeswoman Renee Rashid-Merem said. “Given the confidential nature of those discussions, we won’t discuss any specifics.” UAW spokesman Roger Kerson didn’t immediately return a phone call seeking comment. ‘Serious Blow’ Pacific Investments Management Co., manager of the world’s biggest bond fund, resigned from the bondholder committee last month, Bill Gross, Pimco’s co-chief investment officer, said Jan. 20. The defection of Pimco was a “serious blow” to GM’s exchange offer, KDP Investment Advisors Inc. said at the time. The 10-member bondholder committee includes San Mateo, California based Franklin Resources Inc. and Fidelity Investments of Boston, a person with knowledge of the situation said last month. If GM can’t convince the bondholders and UAW to agree to new terms, the government could force GM to return the loans or convert them into funding for a government-backed bankruptcy. GM has said a bankruptcy may lead to liquidation because it would further erode sales, which fell 49 percent in its home market in January. GM also is required to reduce UAW labor costs to close to parity with foreign automakers with operations in the U.S., such as Toyota Motor Corp. and in a separate equity swap, reduce obligations to a union-retiree health-care fund by 50 percent to $10.2 billion. UAW President Ron Gettelfinger has said he is willing to make concessions if other stakeholders, including bondholders and GM executives also make concessions. Job Cuts GM is also readying a plan this month to cut thousands of salaried jobs, people familiar with those plans said. Those cuts may help with efforts to get additional union concessions, the people said. The job losses may be similar in magnitude to more than 5,000 eliminated last year, the people said. GM is offering retirement incentives to most of its 62,000 UAW members that include $20,000 cash and a $25,000 voucher for a new car for workers willing to retire or quit. About 22,000 of the GM workers are eligible to retire. GM would like to get more than 10,000 union workers to leave and is expecting at least half that many to accept, one person said. Workers have until March 24 to decide. The survival strategy also includes a plan for GM to sell, drop or de-emphasize half of its brands and to cull 1,700 U.S. dealers from its 6,400 total. Chrysler Plan By Feb. 17 GM, along with Chrysler LLC, which borrowed $4 billion, must outline its plan for long-term viability, competitiveness and energy efficiency. The plan must demonstration how the automakers will repay the loans, restructure their business and ensure a positive value for the automakers in the future. The plan must show monthly detail through 2010 and annual projected financial results through 2014. By March 31, GM must have union approval for any contract changes as well as an agreement to cut the costs of the union retiree health-care fund. The automaker must also have begun the debt exchange offer with bondholders. To contact the reporters on this story: Zachary R. Mider in New York at zmider1@bloomberg.net; Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net