Zoomi Life

Both General Motors and Chrysler have been told by the Obama administration’s automotive task force that they should prepare for bankruptcy. The U.S. Treasury has announced that they’re prepping plans to put Chrysler into Chapter 11 for a fast reorganization, which could happen before the month is out.

GM has already announced that Pontiac will be gone by 2011 and will be unloading Saab, Saturn, and Hummer before the end of the year. In all, there are 13 total GM brands hitting the bricks over the next 2 years.  This is according to GM’s latest “viability plan” submitted to the government.

The Saturn brand is one of those likely to be sold off entirely, though the company has said that they are willing to continue production of Saturn vehicles as a contract assmebly deal.  This would make a buyout of Saturn by Saturn dealerships viable–one of the known offers on the table right now.

Hummer and Saab may also see new owners (again). Hummer, a popular brand that GM has shown lots of love to in the past, has several bidders already and the sale could happen sooner than later.  Saab is already in Chapter 11 (or its equivalent) in Sweden right now and dropping it would mean that the company wouldn’t have an American supporter.  GM’s current overseas plants and contracts building Saabs are in the air.

Chrysler, meanwhile, is still struggling to keep from bankruptcy and the latest news from the Treasury is not good. The President’s automotive task force had few good things to say about the company’s operations.  Currently, Chrysler has until April 30 to come up with viability plans and is in the midst of talks with Fiat about an alliance for U.S. sales.

Fiat wants a stake in Chrysler and the UAW is “negotiating” to stick with the company.  Ford recently announced a new agreement with the auto workers union where the UAW took cutbacks to help keep Ford on track, so the same could be done with both GM and Chrysler.

With billions in government handouts at stake, both companies are working hard to prove their viability to get that cash.  Ford, meanwhile, has announced losses that were smaller than anticipated and still refuses bailout funds.

Sources: 1, 2, 3, 4