February 17, 2009
GM seeks $16 billion; dire future looms for Saturn, Saab
Today was the due date for GM and Chrysler to turn in their homework -- a plan defining each automaker's long-term viability. And in defining the way forward, General Motors has put the hangman's noose around Saab and Saturn.
And that's just the start.
Saab will file for bankruptcy at the end of February unless someone else comes to the rescue. The entire Saturn line will die out in 2011 if no one has stepped forward to buy the brand. Pontiac will become a niche brand catering to enthusiasts with high-performance vehicles, while GM focuses on four core brands: Chevrolet, Cadillac, Buick and GMC.
As for the HUMMER brand, the fire sale continues with no suitors in sight. By March 31 — according to GM's plan — the board of directors will decide whether to hold out for a sale or phase out the brand altogether.
All of this comes on the day GM receives the balance of $13.4 billion in taxpayer loans granted last December. In the plan, GM is asking for $16 billion more; $4.6 billion to repay existing lines of credit and a new $7.6 billion line of credit as a hedge against poor sales between now and 2011.
If they get their wish, GM will receive a total of $30 billion in taxpayer money. Assuming everything goes to plan, GM expects to start repaying these loans in 2012. When the loans would be repaid in full is anyone's guess.
This is a bitter pill to swallow, but then again, denying there's a problem often leads to complications. Mixed metaphors aside, the grim future facing all three brands is one with very dire consequences for those who work on the line.
No word yet as to the number of jobs in peril, but we would like to hear your stories of working for a brand with an uncertain fate. The tipline is open at email@example.com
For more information, download the full text of the GM VIability Plan here
[Photo by Bill Pugliano/Getty]