GM Bankruptcy Plan Approved - Boost For Cash for Clunkers?

[Brian Pasch]

Working through the weekend, Judge Robert Gerber announced his approval of the proposed GM Bankruptcy Plan yesterday. With this announcement, consumers may feel better about purchasing a GM car with their Cash for Clunkers rebate monies. According to Judge Robert Gerber the plan was the only way to preserve GM's business. The plan will now allow GM to create a new company minus a truckload of debt.

According to Brian Pasch, CEO of the Pasch Consulting Group, who operates this popular consumer website following the Cash for Clunkers bill:

"From data collected on www.cashforclunkersfacts.com, Chevrolet cars and trucks are the 4th most popular brand on consumers minds who qualify for a Car Allowance Rebate System (CARS) credit. (see chart) From consumer feedback we believe that interest in GM vehicles will increase once the public has knowledge that their bankruptcy plan approval. The news may settle some fears that the company would not be able to stand behind a new car that a consumer would purchase starting July 24, 2009."

GM Bankruptcy Leadership

Fritz Henderson will remain chief executive officer. It is our belief that it will be a difficult challenge for Henderson to rebuild the GM brand and consumer confidence in the company's future. Since the Department of Treasury owns 60% of the company, it would make common sense that this cloud be lifted before the CARS rebate program starts on July 24, 2009. GM can now leverage the CARS incentives. They will first have to fine tune their consumer pitch explaining how the bankruptcy process will allow GM to emerge a stronger and better operated company.

According to the official press release: "A healthy domestic auto industry remains vital to the global economy and we deeply appreciate the support the U.S., Canadian and Ontario governments and taxpayers have given GM, and the sacrifices that have been made by so many. This has been an especially challenging period, and we've had to make very difficult decisions to address some of the issues that have plagued our business for decades. Now it's our responsibility to fix this business and place the company on a clear path to success without delay," said GM CEO Fritz Henderson.