GM Hires Bankruptcy Attorney as Bailout Dies

Some brave Senators are trying to save America from a $14 Billion mistake with a threatened filibuster against the Auto Bailout. At the same time, According to the Wall Street Journal General Motors may be finally realizing that the jig is up:

General Motors Corp. has hired lawyers and bankers to consider whether to file for bankruptcy protection, said several people familiar with the matter.

While still fighting to forestall the move, GM management recently tapped bankruptcy veteran Harvey Miller of New York law firm, Weil Gotshal & Manges LP, to handle what would be one of the largest and most controversial filings in U.S. history. Others involved in the matter include restructuring veterans Jay Alix, Evercore Partners' William Repko, and Blackstone Group's Arthur Newman. Full article subscription needed

Here is the perfect proof that GM needs reorganization. I heard this on Fox this afternoon; Worldwide, Last year GM and Toyota sold the same number of cars. Toyota made a total of 11 Billion Dollars Profit, GM is hiring bankruptcy attorneys.

Despite it all the Senate is working through the night to try to give GM and Chrysler a bailout:

Auto Bailout Bill Collapses in Senate Despite Intense Negotiations Democratic leaders and the White House made final pleas for the bill's passage on Thursday, but the two sides in the Senate failed to forge a compromise FOXNews.com

Thursday, December 11, 2008

A deal on $14 billion in aid to Detroit's Big Three automakers fell apart Thursday night in the Senate despite intense negotiations on Capitol Hill between lawmakers, union officials and representatives from the three companies.

The bailout died after failing 52-35 on a Senate procedural vote.

Earlier in the evening, the talks appeared to have produced a breakthrough, with Democratic leaders "hopeful" that an agreement had been reached that would be acceptable to Senate Republicans, who have resisted the aid package. But Senate Majority Leader Harry Reid came back later to report the effort had failed, adding he was "terribly disappointed."

The White House said it was evaluating its options in light of the breakdown.

"It's disappointing that Congress failed to act tonight," a White House statement said. "We think the legislation we negotiated provided an opportunity to use funds already appropriated for automakers and presented the best chance to avoid a disorderly bankruptcy while ensuring taxpayer funds only go to firms whose stakeholders were prepared to make difficult decisions to become viable."

Republicans, after reviewing the latest version of the proposal in a closed-door meeting, balked at giving automaker federal aid unless their powerful union agreed to slash wages next year to bring them into line with those of Japanese carmakers.

Republican Sen. George V. Voinovich of Ohio, a strong bailout supporter, said the United Auto Workers was willing to make the cuts, but not until 2011.

The collapse of the latest negotiations came as the Wall Street Journal reported Thursday evening that General Motors had hired lawyers and bankers to consider whether to file for bankruptcy, a prospect made more likely by the outcome of Thursday's talks.

A procedural vote is scheduled Thursday night but it is expected to be little more than a formality.

"We just don't have the votes," Reid said. "I dread looking at Wall Street in the morning."

Democratic leaders and the White House made final pleas for the bill's passage on Thursday, but the two sides in the Senate failed to forge a compromise.

The House approved the plan late Wednesday on a vote of 237-170. It would infuse money within days into cash-starved General Motors Corp. and Chrysler LLC. Ford Motor Co., which has said it has enough cash to make it through 2009, would also be eligible for federal aid.

The plan would also create a government "car czar," to be named by President Bush to dole out loans, with the power to force the carmaker into bankruptcy next spring if they didn't cut quick deals with labor unions, creditors and others to restructure their businesses and become viable.

But the legislation has met strong opposition from many Republicans -- including Minority Leader Mitch McConnell -- who claim it does not require enough accountability from auto makers. The Republicans planned to filibuster the legislation to prevent its passage in the U.S. Senate.