Entries Tagged 'Bailout' ↓

It looks like General Motors is taking a page from Chrysler’s 1980s playbook as it will soon be running ads featuring Chairman Ed Whitacre.  This is not an original idea, however, but a copy of something Chrysler’s then chair Lee Iacocca did in 1982 and 1984 (see below for videos), when that company had accepted federal loan guarantees to keep them out of bankruptcy. “If you can find a better car, buy it,” Iacocca said as Chrysler’s pitchman.

The specifics of GMs new ad campaign will be announced today or tomorrow, said a spokesperson at GM. Whitacre, a former AT&T CEO, joined GM’s board after Detroit-based GM’s July 10 exit from a U.S.-backed bankruptcy.

GM is not the only car company to copy Chrysler’s tactic - Ford had Bill Ford appear on TV in 2002, when the company’s shares plummeted over 40% after claims related to fatal rollover accidents of Explorer SUV’s.

Watch the Chrysler Videos from 1982 and 1984:

Update: The Treasury Department along with a committee comprised of major GM bondholders reached an agreement that will give creditors a bigger stake in GM than was previously offered as long as they agree not to block the government’s plans for a quick bankruptcy at the beleaguered automaker.
The agreement, revealed in a SEC filing by GM early this morning, would give the bondholders 10% of the company and also give them the right to buy an additional 15% of the company’s stock at a lower price.

Although this new deal is unlikely to allow GM to avoid bankruptcy altogether, it may help clear away obstacles to the government’s plans to use a bankruptcy as a way to turn around the company.

Citibank’s stock has dropped to sub-$1.00 levels today, as the market dropped on continuing dismal financial news.

The stock, a Dow component had a daily low of 97 cents at noontime.