Fritzilla says: “RAWWWWR!”
The Globe and Mail is reporting that 42% of Canadian GM dealerships will be closed by the end of the year. What they don’t mention is what percentage of those will be rural dealers and what percentage will be metro dealers. From what I understand, it looks like most of the rural dealers are done for and there may also be some lesser trimming of metro ones.
Oh, but there’s more. Fritzilla never sleeps.
Also getting pink slips are over 50% of GM Canada’s hourly workforce. I’m already cringing at the thought of the repercussions this will have on smaller Ontario cities and towns. Places like St. Catharines ON, where GM has a transmission plant, are already hard hit. This may well be the nail in the coffin for the Southern Ontario community. Unless an alternative, thriving industry is started there in the near future. Green-collar jobs anyone?
Oh, and Pontiac is gone as well, as we prognosticated earlier. No more Solstice, no more Vibe, no more G8 GXP. That last one hurts the most. The best car that Pontiac has produced in my lifetime, and it’s for sale for one measly year. Collector’s car, I suppose.
This news all comes from GM’s newest CEO, Fritz Henderson a.k.a. Fritzilla. Fritz, unlike his predecessor, has actually acknowledged the graveness of the situation facing The General and is now looking to reduce the company’s $27 billion debt.
How is he planning to accomplish this monumental task? By having the government and the rest of the bondholders trade debt for equity (in the form of GM shares). If Fritzy-boy gets his way, GM will have only $3 billion in debt, but current stockholders will be out in the cold because all current outstanding shares will account for only 1% of the company. This would leave the US Government Treasury as the primary stakeholder in the company with the other bondholder as minor owners. This “debt-for-equity-swap” would make GM the equivalent of British Leyland. If you don’t remember how poorly that ended, go here.
And I thought it was sad that it’s the end of April and the golf courses aren’t open, then I read about this…