GM plans 'toxic' clearance sale
The bankrupt carmaker is cleaning out its garage in an effort to form a new, pared-down company. But bondholders are fighting over which assets will stay and which will get offered to outside buyers. Jeremy Hobson reports
Paint peels from the GM logo painted on a chimney at the shuttered GM assembly plant in Janesville, Wis. (Scott Olson/Getty Images)
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Kai Ryssdal: Time for a quick check of General Motors. The bankrupt carmaker's got until next Friday to form a new cleaned-up company made up of all the best parts of the old business. Bondholders and other creditors are in court today duking it out over what should be kept and what should be sold. GM's got a lot of property it could unload, including some of its old factories, which gives a whole new meaning to the term toxic assets. Marketplace's Jeremy Hobson reports.
JEREMY HOBSON: GM is having a garage sale. At least that's what bankruptcy lawyer Peter Gilhuly at Latham and Watkins is calling it.
PETER GILHULY: Because they do need to sell a lot of things relatively quickly, because it's costing them money to maintain them, garage sale is a term you could use.
But just like the old CD tower you find at all garage sales, the one with a few missing shelves in it, there's a lot on GM's lawn that even the crazy neighbor doesn't want to buy. Stuff it's been holding for decades. Here's auto industry analyst Dave Sedgwick.
DAVE SEDGWICK: You gotta keep in mind General Motors is, or was, the largest company in the world at one point, and they made just about everything. They made cars, they made trucks, they made kitchen appliances. You know Frigidaire was a GM division.
GM is more than a 100 years old. And just like any centenarian, it's got a lot of junk, including a golf course in New Jersey. And a bunch of old factories that are now known to be contaminated with dangerous chemicals.
Erich Merkle is president of Autoconomy.com. He says it's no surprise GM is being weighed down by real-life toxic assets.
ERICH MERKLE: If you look at any industrial manufacturer that has been around as long as GM has, it?s going to have plants like this.
Merkle says anyone who wants to buy this stuff is going to have quick a cleanup bill on their hands. And with time running out for GM, it's already a buyers market.
I'm Jeremy Hobson for Marketplace.
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