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Adrian PatonGM files for 'Chapter 11' bankruptcy; Holden is safe
June 2nd 2009 14:15
General Motors, once the world's largest car manufacturer and pride of corporate America, has filed for bankruptcy despite receiving more than $19 billion in US government loans to keep it afloat.
The title of "No.1 Selling Vehicle Manufacturer in the World for 76 Consecutive Years" means very little now as GM's bankruptcy listed $82 billion in assets and more than $172 billion in debt.
Bankruptcy reorganisation, or Chapter 11, will see the company sell off its good assets to a new GM, while the less desirable or bad assets will remain in bankruptcy to be liquidated. Meanwhile, the US treasury will provide an additional $30 billion to finance GM during its bankruptcy.
Iconic Australian marque, Holden, a subsidiary of General Motors will be part of the new GM and have been quick to assure employees there will be no changes to its Australian and New Zealand operations as a result of the financial woes of its parent company.
Holden managing director Mark Reuss has told a press conference in Melbourne that Holden is "not planning any job losses" and stressed that Holden in Australia operated as an individual business and "we're making our own luck". However, he could make no guarantees on the effects the international market might have on the company.
He said half the company's production went to export "and I can't say what's going to happen in the Middle-East or the US".
"GM has clearly stated that all of its businesses in the Asia Pacific region - and that includes Holden - continue normal operations and are not directly impacted by this process in the US.''
"No operations outside the US are included in the court filing or court supervised process,'' Mr Reuss said.
"Holden is a subsidiary of GM but we are a corporate entity in our own right - an independent company under Australian law.''
"No operations outside the US are included in the court filing or court supervised process,'' Mr Reuss said.
"Holden is a subsidiary of GM but we are a corporate entity in our own right - an independent company under Australian law.''
Holden has not made a profit in Australia since 2004, but benefitted from a taxpayer-funded $149 million to build a second car manufacturing line for its locally-built small car under the federal government's Green Car Innovation Fund.
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