GM has released their new business plan that the Obama administration has requested to gain more federal support.  The plan is essentially to exchange debt for stock and to eliminate Pontiac, Saab, Saturn and Hummer.  The plan will also eliminate 21,000 US factory jobs by closing down 13 factories.  GM currently has $62.4 billion in debt and the debt for equity trade would cut that amount by $44 billion.  If the government and unions don't accept this offer GM will file for bankruptcy on June 1st.  The plan will also eliminate 6,000 Canadian factory jobs.

Does this plan sound better than filing for bankruptcy and hoping that GMs debt collectors can't crave the company up into several companies?  It's clear that GM thinks they can sell off Saab, Saturn and Hummer because they have singled those brands out saying they will be eliminated but aren't getting the same treatment as Pontiac. 

I think GM is dead and will die slowly until a fire sale occurs and other companies buy up their plants and brands.  GM has some good brands out there with Cadillac and Chevy but it's clear they aren't willing to sell off those brands.  As long as GM holds onto those brands they will continue flap around like a dieing fish.  By selling of Chevy or Cadillac GM could get a large infusion of cash that it could use to pay off it's debt and rebuild.  Sometimes the best thing to do is to trade your best player so that you can get rebuild. 

Source: Star Tribune