Dealers prepare for worst if GM files Chapter 11 bankruptcy

Dealers prepare for worst if GM files Chapter 11 bankruptcy http://www.usatoday.com/money/autos/2009-04-20-gm-dealers-bankruptcy_N.htm
DETROIT Experts are advising car dealers to start preparing themselves
for the very real possibility that General Motors (GM) files for bankruptcy protection.
If the automaker does file, any money owed to dealers for warranty work they've done on cars or for rebates they've already paid to buyers could just disappear, warns Scott Silverman, an attorney.
Many dealers are owed hundreds of thousands of dollars from manufacturers at any given time, says Silverman, partner at law firm McCarter & English who specializes in representing dealers. He says he's been prepping Massachusetts-area dealers for a GM Chapter 11 filing with seminars informing them of their rights and telling them to prepare for the worst.
A bigger issue for dealers down the road would be if a bankruptcy court let GM cancel their franchise agreements. GM already has said it needs fewer dealers and also said it's not going to buy out dealers as it did at huge cost when it closed Oldsmobile. But dealers first must keep from going under because of cash flow problems.
"They are going to have to plan to operate without any expectation of when and if that money is going to come in the door," Silverman says. "It's one issue of bankruptcy, but it's usually a jaw-dropping one for dealers who are already paper thin in the way they're dealing with operations."
Last week, GM CEO Fritz Henderson called a filing "probable." GM has been operating on a $13.4 billion lifeline from the government and has said that without more loans it could be forced into a bankruptcy. President Obama has said it must do significantly more to cut its costs by June 1 to get more aid.
All the bad GM news isn't helping dealers already suffering a massive sales decline. Jim Snell, a Dallas-area dealer of Buick, Pontiac and GMC vehicles, says he thinks his sales may have bottomed.
"They're not really picking up, and they're not getting any worse," he says. "If GM could get off the front page of the newspaper and the lead story on every TV news program you see, I think that would help."
For Buick-Pontiac-GMC dealer Cari Yturri in Great Falls, Mont., the bad news has forced her to have a backup plan. "You have to have a contingency plan if you're not going to get paid right away. You have to have a good relationship with your bank, too."
Yturri says she's trying to rely on used car sales and repairs for a significant part of her revenue, and she's reassuring customers those sides of her business won't go away. She's optimistic GM will continue to make cars, even while in bankruptcy court.
"GM is going to do whatever they need to survive," she says. "I believe there is always going to be a good GM vehicle out there for us to sell."
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Hmmmm...... where is it?
People have been looking for a good GM vehicle for decades now.
And where is Mike Hunt with all the sales???
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wrote:

With a few exception, all auto manufacturers are having sales problems. Toyota sales are down almost as much as GMs and Toyota is getting bailout money from the Japanese government. The biggest difference I preceive is that a lot of Americans actually want GM to fail. I've never been a big GM fan, but I am not so stupid that I want them to fail. Billion for banks that have robbed millions of American has caused realatively litte public outrage. A relative drop in the bucket for GM and you would think the world was coming to an end. It seems to me that people don't care that the government is subsidizing the pay of idiot Corporate execs to the tune of millions of dollars each, but that they get all upset that some UAW guy is getting decent benefits and $21 per hour.... Be honest, who did a better job last year - they typical GM line worker, or the guys unning AIG, Chase, BofA, etc....
Ed
Ed
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Might be a stupid question , but here it goes , what will happen if GM does declare bankruptcy to all those out there that have financed with GM for their cars at the dealership?? Or does it not effect them.
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When GM goes bankrupt next month a lot of people will lose their jobs and hell of a lot of people will lose hell of a lot of money.
The dealers and part suppliers will immediately lose their footing.
Most real people have realized this happening a long time and have stayed away.
There is not much different now that GM is tumbling down because of management stupidity over the years other than the size of GM is making it different and affecting more people in the process.
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No change. Those notes are sold off in a short time and GM gets the money right away.
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Those cars were financed through financed organizations - GMAC, banks, etc. Separate from GM.
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They have fewer dealers every day. Last week one dealer here in CT has all the new cars on his lot hauled away by the repo man. Others just closed from lack of sales and the money to support the place.
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