GM Bankruptcy Appears Likely

General Motors bondholders have until midnight to accept equity exchange.  UAW reaches agreement to reduce retiree benefits. Here's the latest from CNBC's Phil LeBeau.



Also, the Wall Street Journal reports the UAW tells its reporters the federal government will provide massive additional financing assistance to GM to fund the VEBA (Voluntary Employee Beneficiary Association).

News: Several Top GM Executives Dump Stock

The Wall Street Journal reports six top General Motors executives have liquidated their stock holdings in the struggling company.  GM stock is down sharply on the New York Stock Exchange, quickly approaching $1 a share.  GM stock hasn't been this low since the early 1930's according to CNBC.

According to WSJ reporter Matt Phillips, Vice Chairman Bob Lutz was the biggest seller shedding more than 81,000 shares netting nearly $131,000.  Putting that in perspective, Lutz' shares were worth about $1.7 million a year ago.

News: GM CEO Updates Restructuring

General Motors President and CEO Fritz Henderson held a media conference call this morning to provide updates on the company's restructuring efforts.  The headlines are as follows:

• Bankruptcy is still very probable.
  
• Negotiations continue with two potential buyers for HUMMER.  Deal could happen within two weeks.
  
• Several parties are interested in Saturn.  No deal imminent.
  
• GM is looking at the possibility of moving its headquarters out of Detroit's Renaissance Center.
  

The HQ note is quite a surprise.  The Detroit Free Press reports Henderson dodged answering specific questions about a possible move.  GM moved into the RenCen in 1996 and immediately spent $500 million to upgrade the complex which was originally built by the Ford Motor Company's real estate arm and opened in 1977.  GM financed the upgrades and leased the building from the lenders.  When the lease expired on May 1, 2008, GM bought the building for $626 million in cash according to documents filed with the Securities and Exchange Commission.

If GM is seriously considering selling the RenCen, how much could the company get on the still struggling Detroit real estate market?  And, what building would GM move headquarters operations into?

News: Ford to Build Next Generation Focus at Former SUV Plant

Ford Motor Company is making a major investment that will bring its Michigan Assembly Plant in Wayne back to life with a new mission.

Ford announced it is investing $550 million to transform Michigan Assembly into a "lean, green and flexible manufacturing complex" that will build Ford’s next-generation Focus global small car, including a new battery-electric version of the for the North American market.

The plant, formerly the production site for Ford Expedition and Lincoln Navigator SUVs, is one of three light truck plants Ford is retooling to build fuel-efficient global small cars in the coming years. The new Focus will begin rolling off the line next year and the battery-electric version – Ford’s first all-electric passenger car – debuts in 2011.

“The transformation of Michigan Assembly Plant embodies the larger transformation under way at Ford,” said Ford President and CEO Alan Mulally. “This is about investing in modern, efficient and flexible American manufacturing. It is about fuel economy and the electrification of vehicles. It is about leveraging our expertise and vehicle platforms around the world and partnering with the UAW to deliver best-in-class global small cars. It is about skilled and motivated teams working together in new ways to create the future of automobile manufacturing in the United States.”

As part of the retooling, Ford will consolidate its operations from Wayne Assembly Plant. When production launches in 2010, approximately 3,200 employees will be building the new Focus at Michigan Assembly Plant.

News: Chrysler Offers New Incentives

Beginning today, Chrysler is launching a new campaign to keep current customers and attract new ones.

"Chrysler LLC is building a new car company, and we are asking consumers to come see what we are building for you as we begin a vibrant new phase of our company," said Steven Landry, Executive Vice President North American Sales and Marketing, Global Service and Parts — Chrysler LLC. "Consumers are telling us that the net purchase price of the vehicle is the most important factor right now, so we are pleased to introduce incentives that address what the consumer is looking for."

Chrysler is offering up to $4,000 Consumer Cash on 2009 model vehicles, $1,000 Owner Loyalty for current Chrysler vehicle owners that is good towards most 2008 and 2009 Chrysler, Jeep and Dodge vehicles and up to $1,000 Credit Union Bonus Cash for qualified members who finance their new vehicle purchase through a participating credit union. The new incentives are valid through June 1, 2009.

More than 1,500 credit unions, representing 40 million members in all 50 states, are participating in the "Invest in America" program, which offers low-rate financing on new vehicle purchases for approved members, and the additional bonus cash of up to $1,000 mentioned above is available.

Chrysler, LLC is currently working through Chapter 11 bankruptcy proceedings in advance of a merger with Italian automaker Fiat.