DETROIT – Just a day after its stock price dropped to levels not seen since 1933 and its bonds tumbled to record lows as well, we may have our clearest sign so far that General Motors is inching closer to bankruptcy. Today in the Free Press we’re reporting that the company has moved up some of its supplier payments from the first week of June to the end of May, just days before the government-imposed deadline. Now that may be great news for the balance sheets of the Tier Ones on that list, but auto analysts see this as just short of absolute proof that GM will file Chapter 11 in just a little over two weeks.
Meanwhile, speaking of automakers in bankruptcy, we’ve got an update on the UAW no-strike promise to Chrysler. As we reported back on April 30th and as confirmed this week by U.S. Bankruptcy Court documents, the union has pledged not to strike the company anytime before the fall of 2015. This extends the original no-strike agreement the union worked out with the administration when Chrysler received its first TARP loan a few months ago, and is just one of a long list of UAW concessions that the auto industry task force asked for, so Chrysler would qualify for the more than $10 billion in government support during restructuring.
And one of the results of that restructuring, if Fiat gets its way, could be a global alliance between itself, Opel, Chrysler and GM. Bloomberg News is reporting that if Fiat becomes GM’s partner running Opel, it plans to create a new company that would share future designs and technology between the four divisions. How this alliance would work isn’t quite clear yet but we do know that GM has said all along that it wanted to retain some sort of link with Opel and this may be the best way to achieve that. By the way, European Union officials are already prepping for a fight by speculating that such an alliance would eliminate up to 18,000 jobs in Europe.
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