THE EVENT:
General Motors exited bankruptcy protection early Friday -
faster than expected and pledging to "get back to the business of
building great cars and trucks" and better serving customers.
THE DETAILS:
The auto maker completed the split of good and bad assets that
saw General Motors Co. emerge as the operating entity. The
slimmed-down company is mostly owned by the U.S. government, but
with a much-reduced debt burden and fewer brands. Only the
Chevrolet, GMC, Buick and Cadillac brands remain.
LOOKING FORWARD:
General Motors Co. CEO Fritz Henderson unveiled a sweeping
management revamp and pledged to repay loans from the U.S.
government "much sooner" than 2015. He said GM would launch 10 new
products in the U.S. over the next 18 months, as well another 17
overseas.
In addition, 77-year-old Robert Lutz, a longtime GM product
development executive, will put off retirement plans to become head
of the company's communications and marketing.
GM is also testing a new online auction buying system with eBay
Inc. (EBAY).
THE FINANCIAL OUTLOOK:
CFO Ray Young said the auto maker is evaluating whether it will
need all of the $50 billion that the U.S. government has committed
to give the company to keep it operating. Young also said GM may
make a sizable contribution to its pension funds as early as late
2009 to shore up the funds and take advantage of what could be the
bottom of the market for pension investments.
WHAT'S NEXT:
One of the new company's first hurdles will be dealing with a
battered supplier base littered with companies that are either in
or close to filing for Chapter 11. The restructured company could
launch an initial public offering of stock as soon as the second
quarter of 2010, but will wait longer if necessary to ensure market
conditions are right, Young said.
THE MARKETS:
Market reaction was muted, given that GM's emergence from
Chapter 11 was expected. N.Y. stocks ended slightly down Friday on
fears of slumping earnings in the wake of sagging consumer
confidence.
For more Dow Jones coverage, please see:
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=GM's First Challenge: Navigating The Battered Supplier Sector
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