what is GMs true value?
GM is negotiating with the UAW to give the union equity in the new company should GM file for bankruptcy protection. If GM can reduce that $20 billion burden, use bankruptcy to ditch most of its $28 billion in bond debt, and consolidate down to its four core brands, the company could be viable, say sources close to GM and Treasury. At the same time, GM management wants to avoid bankruptcy by cutting its long-term obligations to the union and creditors out of court. All of that requires the union and bondholders to take stock in GM. While GM’s shares trade at just 2 now, management has made the case that with less debt and without constant bankruptcy speculation, it would be worth far more. But all sides involved have been debating the company’s true value. If GM can slash those liabilities in or out of court, the government would then be more willing to loan GM upwards of $30 billion that the company needs to stay afloat until car sales rebound. The task force has said a GM bankruptcy
