Cdn. Govt. to back GM/Chrysler Warranties

[BBQGuy]

http://business.theglobeandmail.com/servlet/story/RTGAM.20090407.wwarranties0407/BNStory/Business/home

Is this enough for folks who have been wondering out loud what would happen to the warranties to consider and GM or Chrysler vehicle? Or is the resale value for a dead brand a bigger concern?

[Engi-Nir]

All I can say is FINALLY...



GM in "intense" bankruptcy preparations

NEW YORK (Reuters) - General Motors Corp is in "intense" and "earnest" preparations for a possible bankruptcy filing, a source familiar with the company's plans told Reuters on Tuesday.
A plan to split the company into a new company made up of the most successful units, and an 'old company' of its less-profitable units is gaining momentum and is seen as the company's best configuration for the future, said another source familiar with the talks.

The sources asked for anonymity saying they were not authorized to speak on the record.

GM Chief Executive Fritz Henderson has said the company prefers to restructure out of court but could go to court if needed. GM declined to comment further.

[evoviii]

I guess the table is now set, not that it was that much of a surprise. Though I wonder by holding out the bondholders and unions would lose more going through bankruptcy than if they had taken more cuts.

Resale value is already hurt by the huge discounts even if GM were to continue to operate normally along with the perception of a bankrupt company and the quality. Buying used GM would be a better option

[BBQGuy]

Buying used GM would be a better option

The way I read it the warranty guarantee is only for vehicles sold new as of today.... so a used GM sold prior to today but still under warranty should be worth far less than a new GM bought after today.

So if you just bought a GM or Chrysler, you don't get the protection. If you buy one now you do.

[hagbard]

The way I read it the warranty guarantee is only for vehicles sold new as of today.... so a used GM sold prior to today but still under warranty should be worth far less than a new GM bought after today.

So if you just bought a GM or Chrysler, you don't get the protection. If you buy one now you do.

Which is a total scam. Why should I pay for someone elses warranty when they buy tomorrow and I be denied the remainder of my warranty when I bought last October? Yet another reason I won't be paying my income taxes.

[ES_Revenge]

Yet another reason I won't be paying my income taxes.
Uhhhh, a little OT but I would definitely advise against that course of action. The government will catch up with you eventually and when they do it will not be a good time. :|

[SkiD]

Resale value is already hurt by the huge discounts even if GM were to continue to operate normally along with the perception of a bankrupt company and the quality. Buying used GM would be a better option

Actually, just about every new car out there has major 'cash on the hood' so basically anyone that has bought a car in the last couple of years has lost money on resale.

[SkiD]

Which is a total scam. Why should I pay for someone elses warranty when they buy tomorrow and I be denied the remainder of my warranty when I bought last October? Yet another reason I won't be paying my income taxes.

Chances are the government would never have to pay any money out, this is more of a PR thing to make people feal reassured about purchasing the vehicles.

[ispiratica]

I wonder whats the point of putting in any amount of money to save Chrysler and GM when they ought to just save only Chevy and let the rest go to hell.

Maybe they ought to send the unions to work for Honda/Toyota and expand those plants in the future as soon as the recession is over. At least then you know you're getting a job at a solid firm and the tax money isn't just flushed away.

[hagbard]

Uhhhh, a little OT but I would definitely advise against that course of action. The government will catch up with you eventually and when they do it will not be a good time. :|

They won't be able to do a thing about it. :D

[chriswalsh]

Maybe they ought to send the unions to work for Honda/Toyota and expand those plants in the future as soon as the recession is over. At least then you know you're getting a job at a solid firm and the tax money isn't just flushed away.

I suspect the transplants would slam the door on any former UAW/CAW worker...

[CaptSmethwick]

I guess the table is now set, not that it was that much of a surprise. Though I wonder by holding out the bondholders and unions would lose more going through bankruptcy than if they had taken more cuts.

Resale value is already hurt by the huge discounts even if GM were to continue to operate normally along with the perception of a bankrupt company and the quality. Buying used GM would be a better option

There's a school of thought that suggests that bondholders would get more if GM declares bankruptcy and these people may hold the balance of power here. Perversely, this may be because the US bailout package provides financial institutions with protection against losses from such things.

[AGR-1]

Its an epic game of brinkmanship that is being played out, there are stakeholders that took "haircuts" and have to take further "haircuts" they either do it willingly on the 59 day or GM will re organize under C11.

The gov't backstopping warranties is good PR to instill confidence in case on the 59 day the 23rd hour and 58 minutes it all falls apart and GM goes C11 to re organize into perhaps a "good company" and a "bad company".

They can go to the stakeholders and mention their terms, the "stakeholder" says NO, GM says OK we go C11 then see what you will get. Its an interesting game, especially that GM is too big, and some stakeholders one way or another will be "roadkill".

Keep in mind that GM shareholders have been taking a steady haircut for several months now, they are down to a number one clip, next step is a shaved head for the shareholders.