Could GM File for Bankruptcy?

Delphi's bankruptcy may force GM into bankruptcy according to Bloomberg

Delphi's filing two days ago might add as much as $11 billion to GM's retirement costs if the automaker has to meet a 1999 promise to guarantee Delphi pensions, GM said. If GM, the world's biggest automaker, tries to renege, it may complicate talks with the United Auto Workers union, said Sanford C. Bernstein & Co. analyst Brian Johnson.

GM faces many of the same issues that pushed Delphi into bankruptcy including high legacy costs and tough deals with unions. Delphi filed bankruptcy on the 8th in part to force better contract terms on its unions. GM stock is down 4.8% so far this morning.

On another note, Merck is up 2.75% as of 11:00 Monday morning


Timothy Burger
timothyb(at)timothyburger.com