DETROIT: General Motors is trading for 67 cents a share this morning. The grand old dame of the auto industry, incubator of the Corvette, Camaro, GTO, Firebird and Trans Am and hundreds of other models, filed for bankruptcy on Monday after a protracted but futile effort to stay afloat. GM filed for Chapter 11 protection in the U.S. Bankruptcy Court for the Southern District of New York. The company reported assets of $82.3 billion and debt of $172.8 billion. GM’s represents one of the largest bankruptcies in U.S. history and that of a second of a major car company in about a month. Chrysler filed April 30.
The federal government has agreed to provide GM $30 billion in exchange for 60 percent of the reorganized company. Judge Robert E. Gerber yesterday released $15 billion of that as debtor-in-possession financing and scheduled the asset sale for June 30.
General Motors and its dealers represent one of the biggest revenue sources in broadcast TV. GM dealerships alone contributed $264 million in spot buys among the top 100 TV markets last year. Several broadcast groups issued caveats in 1Q09 filings regarding the impact of a GM bankruptcy on 2Q results. Some of the country’s top media buying agencies are listed among GM’s creditors. Starcom Mediavest is No. 1 on the list, claiming to be owed $121.5 million. Magna International is No. 10 with a $26.8 million claim. Publicis Groupe SA is No. 13 with $25.3 million. Interpublic, No. 15, is owed $16 million.
GM’s post-reorg ad campaign is already on deck, according to Business Week. Starting next week, GM ads will address “its past mistakes” and say the car company “is still in business and ready for the big fight,” the article said. Ad dollars will be concentrated on the Chevy and Cadillac brands, with Chevy matching Toyota dollars in 2010. A campaign for the Buick Lacrosse sedan and Enclave SUV will be launched this month.
GM brands include Buick, Cadillac, Chevrolet, GMC, GM, Pontiac, Saab, Saturn, Hummer and a few others. Pontiac previously was slated for phase-out by the end of next year. Hummer, Saab and Saturn are expected to be sold by the end of this year. Of GM’s 235,000 employees, 90,000 work in U.S. operations--where the bankruptcy is focused.
The car company previously received around $19 billion in bail-out money from the Fed, but was nonetheless able to restructure without bankruptcy protection. Yesterday’s hearing drew a crowd that queued up outside of the court in Lower Manhattan, according to Tomoeh Murakami Tse of The Washington Post’s Tomoeh Murakami Tse, who Twittered live from the hearing. She noted that GM chief Fritz “Henderson is wearing a pink tie.” A speaker-phone crack about corporate jet travel also incited the judge, who threatened to disconnect misbehaving hacks.