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General Motors quickly emerged from its May 31st Chapter 11 filing this morning, benefiting from the Chrysler bankruptcy process before them and Auto Task Force drive to get the corporate giant back on its feet. The transition from old to new GM should be rather seamless for consumers, at least initially.
GM has culled four divisions from its portfolio and down the road it plans to significantly reduce its dealer body by not renewing franchise agreements. These 1,100 dealerships, representing about 18 percent of GM’s total dealers, will have until October 2010 to sell their remaining cars. The product line up will drop from 48 to 34 nameplates in the process.
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This Q&A addresses some common questions, and we will continue to provide additional insights and advice as General Motors and Chrysler both begin their new chapters. For more information, go to our Auto Crisis page. Also, learn how bankruptcy works.
Who owns the new GM?
Earning the nickname “Government Motors,” the American tax payers are the majority owner for the new company. GM ownership breaks down to:
The United States government—a 60.8 percent stake.
A trust fund (VEBA) that provides medical benefits for United Auto Workers retirees—17.5 percent.
The governments of Canada and the province of Ontario—11.7 percent.
Bondholders of the old GM—10 percent.
What brands and models are available?
The new GM will include Buick, Cadillac, Chevrolet, and GMC brands. GM has stripped itself of Pontiac, Hummer, Saab, and Saturn. The latter three divisions are being sold to other companies, so those brands are expected to continue to be available in the United States. Future GM models include the Buick LaCrosse; Cadillac CTS coupe, CTS Sport Wagon and SRX; Chevrolet Cruze, Orlando, Spark, and Volt; and GMC Terrain.
Will I be able to get parts and service for my GM car?
GM dealers will continue to provide service, as before. Hummer, Saab, and Saturn dealers will be supported until they are sold off, enabling them to continue without interruption. In emergency situations, most of these vehicles can be serviced at any GM dealer. Perhaps the greatest consumer impact will be the significant reduction in dealerships, making car maintenance less convenient.
Keep in mind that you don't have to take your car to a dealership for servicing, even if it’s under warranty. A good independent shop, especially one that specializes in your car’s brand, should be able to handle routine maintenance and many repairs. Moreover, independent repair shops are often less expensive than dealerships and, according to our Annual Auto Survey, generally provide a higher level of satisfaction. You will need to go to a dealership, however, for warranty and recall work.
