General Motors, please repeat after me:
We, General Motors take you The United States of America to be our number one producer of wealth, to have and to hold from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, to love and to cherish till death do us part.
The United States of America, please repeat after me:
We, The United States of America, take you General Motors to be our number one source of wealth, to have and to hold from this day forward, for better, for worse, for richer, for poorer, in sickness and in health, to love and to cherish till death do us part.
The moral of the story...
It's a lot easier to make a commitment, than it is to keep one.
Wednesday, June 3, 2009
Friday, May 15, 2009
What is preventing GM from closing their non-profitable North America manufacturing sector, and transforming themselves into a well know import?
May 13, 11:59 PM EDT
Chinese imports could bring GM political troubles
DETROIT (AP) -- As thousands of General Motors workers await word on more U.S. plant closures, reports that the company plans to import Chinese-made vehicles to the U.S. have created a political problem for the automaker and the White House.
The reports, which GM will neither confirm nor deny, could mean trouble because GM is supported by $15.4 billion in U.S. government loans, largely due to the Obama administration's desire to preserve the company's 90,000 U.S. jobs.
The United Auto Workers charged last week that the Detroit automaker intends to almost double over the next five years the number of vehicles it imports to the U.S. from Mexico, South Korea, China and Japan.
"GM should not be taking taxpayers' money simply to finance the outsourcing of jobs to other countries," Alan Reuther, the union's Washington lobbyist, wrote in a letter to U.S. lawmakers.
The carmaker, which was in danger of running out of cash early this year, faces a June 1 government deadline to cut costs and complete other restructuring measures or go into Chapter 11 bankruptcy protection. It also has requested another $11.6 billion in government loans to make it through this year, and faces the prospect that the government will soon be its largest shareholder.
On Wednesday, Shanghai Securities News and other Chinese media reported that GM plans to begin exporting vehicles from China to the U.S. within two years, ramping up sales to more than 50,000 by 2014.
GM spokesman Tom Wilkinson in Detroit would not comment on the reports. The White House and Treasury Department did not immediately respond to requests for comment.
"GM is reviewing various options," GM's China office said in a written statement received Thursday. "We are not discussing details of our future portfolio, beyond what we have disclosed in auto shows and our viability plans."
But the report reiterated the company's emphasis on first meeting demand in the Chinese domestic market.
"GM's philosophy has always been to build where we sell, and we continue to believe that is the best strategy for long-term success, both from a product development and business planning standpoint," it said.
Harley Shaiken, a professor at the University of California at Berkley who specializes in labor issues, said increased overseas production and imports could prove politically tricky for GM.
"The reason is simple - production location is a corporate decision, but when it's on the taxpayer dime, there are different sensitivities, so the notion of billions for a rescue package and offshore production, I think, could be politically combustible," he said.
Shaiken said GM needs to lower costs, which is accomplished with cheaper overseas labor. But it must also address concerns of the U.S. government, which wants to preserve American jobs.
"GM is getting funding from U.S. taxpayers to help save the company," Sen. Sherrod Brown, D-Ohio, said. "Taxpayers deserve more than Chinese imports in return. Taxpayer funds should be used to build the next generation of fuel-efficient vehicles in the U.S., not abroad. This is about creating jobs and rebuilding our economy."
GM, though, says the percentage of cars made and sold in the U.S. will remain stable.
Company documents show that American-made cars will comprise 67 percent of all vehicles sold in the country this year. The number drops slightly to 66 percent in GM's 2014 projections. Imports will amount to 33 percent this year, rising to 34 percent by 2014.
The company says the import mix could change by 2014, with fewer vehicles produced in Canada and more produced in Mexico and other countries.
"The percentage sold in the U.S. will stay constant within a percent or two," Wilkinson said. "The number of vehicles built in the U.S. will increase as the market recovers."
He reiterated that the company's goal is to build vehicles in the regions where they are sold, in part to avoid getting stung by currency fluctuations. GM, he said, builds 90 percent of vehicles sold in the U.S. in North America, and that is not expected to change.
Of the 3 million vehicles GM sold in the U.S. last year, it imported the Chevrolet Aveo and Pontiac G3 subcompacts from South Korea, the Pontiac G8 muscle car from Australia and the Saturn Astra compact from Belgium. The Saturn Vue, Chevrolet HHR small sport utility vehicles and several pickup truck models were imported from Mexico. Full-size pickup trucks, several sedans and small SUVs and the Chevrolet Camaro were brought in from Canada.
Still, the UAW generally opposes importing vehicles into the U.S. According to its figures, the percentage of GM's U.S. sales from Mexico, South Korea, Japan and China will increase from 15.5 percent now to 23.5 percent in 2014.
Reuther wrote that GM's increased imports would be equal to the output of four U.S. assembly plants, "the same number that GM plans to close."
The union currently is negotiating with GM for government-demanded labor cost cuts, including 16 plant closures. At a leadership meeting in Cleveland Wednesday, leaders were told to expect a vote on concessions before the June 1 deadline.
GM millwright Ron Bear of Belleville, Mich., who attended the meeting, said the rank-and-file would be unhappy with any more imports.
"As far as importing cars, what is that going to do for our jobs? I guess that's the question," he said.
GM would be the first company to import cars from China although automakers have brought in components in the past to save on labor costs. Most Chinese automakers have been daunted by meeting U.S. safety standards. They also face the uphill battle of winning consumer confidence for unfamiliar brands.
According to Chinese media reports, the primary exports to the U.S. would be small cars similar to the Chevrolet Spark subcompact.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, says it makes good business sense for GM to import subcompacts from China because the U.S. market for them is uncertain, but there is strong demand in China.
With gas prices around $2 per gallon most Americans will keep driving bigger cars. U.S. sales would be too small to justify the expense of building and equipping an assembly plant, he said. At the same time, exports to the U.S. would allow GM to keep its Chinese plants running at maximum capacity, which is the formula to make money, he said.
"In the short term, you're going to locate your plants where the core of the market is for that product," he said.
Cole suggested that for Obama, returning the company to viability would outweigh the drawbacks of importing some cars.
"What's more important, some jobs in a particular factory somewhere or the overall success of the company?" Cole asked. "That is really far more important."
---
Associated Press writers Ken Thomas and Jim Kuhnhenn in Washington, Thomas J. Sheeran in Cleveland, Dan Strumpf in New York and Elaine Kurtenbach in Shanghai contributed to this report.
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Chinese imports could bring GM political troubles
DETROIT (AP) -- As thousands of General Motors workers await word on more U.S. plant closures, reports that the company plans to import Chinese-made vehicles to the U.S. have created a political problem for the automaker and the White House.
The reports, which GM will neither confirm nor deny, could mean trouble because GM is supported by $15.4 billion in U.S. government loans, largely due to the Obama administration's desire to preserve the company's 90,000 U.S. jobs.
The United Auto Workers charged last week that the Detroit automaker intends to almost double over the next five years the number of vehicles it imports to the U.S. from Mexico, South Korea, China and Japan.
"GM should not be taking taxpayers' money simply to finance the outsourcing of jobs to other countries," Alan Reuther, the union's Washington lobbyist, wrote in a letter to U.S. lawmakers.
The carmaker, which was in danger of running out of cash early this year, faces a June 1 government deadline to cut costs and complete other restructuring measures or go into Chapter 11 bankruptcy protection. It also has requested another $11.6 billion in government loans to make it through this year, and faces the prospect that the government will soon be its largest shareholder.
On Wednesday, Shanghai Securities News and other Chinese media reported that GM plans to begin exporting vehicles from China to the U.S. within two years, ramping up sales to more than 50,000 by 2014.
GM spokesman Tom Wilkinson in Detroit would not comment on the reports. The White House and Treasury Department did not immediately respond to requests for comment.
"GM is reviewing various options," GM's China office said in a written statement received Thursday. "We are not discussing details of our future portfolio, beyond what we have disclosed in auto shows and our viability plans."
But the report reiterated the company's emphasis on first meeting demand in the Chinese domestic market.
"GM's philosophy has always been to build where we sell, and we continue to believe that is the best strategy for long-term success, both from a product development and business planning standpoint," it said.
Harley Shaiken, a professor at the University of California at Berkley who specializes in labor issues, said increased overseas production and imports could prove politically tricky for GM.
"The reason is simple - production location is a corporate decision, but when it's on the taxpayer dime, there are different sensitivities, so the notion of billions for a rescue package and offshore production, I think, could be politically combustible," he said.
Shaiken said GM needs to lower costs, which is accomplished with cheaper overseas labor. But it must also address concerns of the U.S. government, which wants to preserve American jobs.
"GM is getting funding from U.S. taxpayers to help save the company," Sen. Sherrod Brown, D-Ohio, said. "Taxpayers deserve more than Chinese imports in return. Taxpayer funds should be used to build the next generation of fuel-efficient vehicles in the U.S., not abroad. This is about creating jobs and rebuilding our economy."
GM, though, says the percentage of cars made and sold in the U.S. will remain stable.
Company documents show that American-made cars will comprise 67 percent of all vehicles sold in the country this year. The number drops slightly to 66 percent in GM's 2014 projections. Imports will amount to 33 percent this year, rising to 34 percent by 2014.
The company says the import mix could change by 2014, with fewer vehicles produced in Canada and more produced in Mexico and other countries.
"The percentage sold in the U.S. will stay constant within a percent or two," Wilkinson said. "The number of vehicles built in the U.S. will increase as the market recovers."
He reiterated that the company's goal is to build vehicles in the regions where they are sold, in part to avoid getting stung by currency fluctuations. GM, he said, builds 90 percent of vehicles sold in the U.S. in North America, and that is not expected to change.
Of the 3 million vehicles GM sold in the U.S. last year, it imported the Chevrolet Aveo and Pontiac G3 subcompacts from South Korea, the Pontiac G8 muscle car from Australia and the Saturn Astra compact from Belgium. The Saturn Vue, Chevrolet HHR small sport utility vehicles and several pickup truck models were imported from Mexico. Full-size pickup trucks, several sedans and small SUVs and the Chevrolet Camaro were brought in from Canada.
Still, the UAW generally opposes importing vehicles into the U.S. According to its figures, the percentage of GM's U.S. sales from Mexico, South Korea, Japan and China will increase from 15.5 percent now to 23.5 percent in 2014.
Reuther wrote that GM's increased imports would be equal to the output of four U.S. assembly plants, "the same number that GM plans to close."
The union currently is negotiating with GM for government-demanded labor cost cuts, including 16 plant closures. At a leadership meeting in Cleveland Wednesday, leaders were told to expect a vote on concessions before the June 1 deadline.
GM millwright Ron Bear of Belleville, Mich., who attended the meeting, said the rank-and-file would be unhappy with any more imports.
"As far as importing cars, what is that going to do for our jobs? I guess that's the question," he said.
GM would be the first company to import cars from China although automakers have brought in components in the past to save on labor costs. Most Chinese automakers have been daunted by meeting U.S. safety standards. They also face the uphill battle of winning consumer confidence for unfamiliar brands.
According to Chinese media reports, the primary exports to the U.S. would be small cars similar to the Chevrolet Spark subcompact.
David Cole, chairman of the Center for Automotive Research in Ann Arbor, says it makes good business sense for GM to import subcompacts from China because the U.S. market for them is uncertain, but there is strong demand in China.
With gas prices around $2 per gallon most Americans will keep driving bigger cars. U.S. sales would be too small to justify the expense of building and equipping an assembly plant, he said. At the same time, exports to the U.S. would allow GM to keep its Chinese plants running at maximum capacity, which is the formula to make money, he said.
"In the short term, you're going to locate your plants where the core of the market is for that product," he said.
Cole suggested that for Obama, returning the company to viability would outweigh the drawbacks of importing some cars.
"What's more important, some jobs in a particular factory somewhere or the overall success of the company?" Cole asked. "That is really far more important."
---
Associated Press writers Ken Thomas and Jim Kuhnhenn in Washington, Thomas J. Sheeran in Cleveland, Dan Strumpf in New York and Elaine Kurtenbach in Shanghai contributed to this report.
© 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. Learn more about our Privacy Policy.
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Copyright 2008 Associated Press
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Michigan
More auto cuts: GM will eliminate 1,100 US dealers
More Michigan budget cuts planned for 2009-10
Mich. woman will face murder trial in 4 deaths
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Motown Records, one of the most iconic sounds of the 20th century, was founded in Detroit in 1959 by Berry Gordy. - Jan. 7, 2009
Rep. John D. Dingell, America's longest-serving Congressman - Feb. 6, 2009
Detroit in transition - Sep. 11, 2008
The inauguration of Barack Obama, 44th U.S. president - Dec. 4, 2008
Continuing coverage: Auto industry in crisis - Nov. 13, 2008
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Wednesday, January 14, 2009
 |
Global CIO: Satyam Scandal Isn't The End Of Indian Outsourcing
The company's misdeeds should be a wake-up call to CIOs, but not an indictment of the Indian outsourcing industry as a whole.
By M.S. Krishnan, InformationWeek
Jan. 13, 2009
URL: http://www.informationweek.com/story/showArticle.jhtml?articleID=212900112
The recent confession about inflated revenue, profits, and accounting fraud exceeding $1.5 billion by Satyam Computer Services chairman and CEO Mr. Ramalinga Raju has put everyone linked to the Indian software industry in total disbelief and frustration. Only a few weeks back, Satyam was considered as one of the four pillars of the success story of the Indian software industry in the global economy. Along with Infosys, Tata Consultancy Services, and Wipro, Satyam was known for its coveted Fortune 500 clients, innovative software projects, capacity to train thousands of software engineers, and best-in-class certification of software engineering practices.
The irony is that last year Satyam won the "Golden Peacock" corporate governance award from the London-based World Council for Corporate Governance (although that award was revoked late last week). It is understandable that this major accounting fraud in the background of such accolades and credence has formed a cloud of uncertainty and doubts about credibility in the entire Indian software industry. There is no doubt that the fraud committed by the management at Satyam under the certification of internationally reputed audit firms is unforgivable and has created a black mark on corporate governance in India.
In that context, the disclosure of the misdeeds at Satyam is certainly an alert call for any CIOs who have exposure to Indian software firms as partners in their global resource network. However, I believe it would be shortsighted -- and probably harmful -- to taint the entire Indian software industry based on the Satyam fiasco.
Not Every Mole Is A Cancer
We do not conclude that every big mole that bleeds is a skin cancer; obviously, we collect data and investigate further before drawing our conclusion. In a similar way, I believe for several reasons that this major failure of corporate governance at Satyam is not a structural problem with the capabilities of the Indian software industry as a whole, or with that of software talent in India. And I would thereby urge global customers engaged with outsourcers in India or elsewhere to not act too hastily based solely on the malfeasance of Satyam's founder.
First, despite the corporate governance problems at Satyam, none of their global customers had raised any concerns related to the quality of operational delivery and performance in their projects. In fact, there has been an increase in the size and scope of projects delivered to global customers by the major Indian software firms over the last few years. Hence if it had been a problem related to inability to execute large projects, we would have heard this from the market loud and clear.
Second, it may be interesting to note that of all the major software groups in India, only at Satyam had the top management shifted its attention away from its core software business in the last few years. The real-estate business controlled by Satyam owners had expanded substantially with projects worth nearly $10 billion last year. As in other developing economies, the real estate sector in India is known for structural problems related to transparency, accountability, and ownership rights. While the answers to the questions on how Mr. Raju managed this fraud and why he did it will be known only when the regulators and government complete their investigations, it is not a surprise that some media reports are claiming that the accounting fraud at Satyam may be linked to the real-estate business of its owners/promoters.
Finally, the operational implementation team at Satyam has recently won several accolades from global IT vendors such as the Pinnacle award from SAP in June 2008 for excellence in customer experience and accelerating innovation. Similarly, Satyam received two prestigious shared-services excellence awards last year from the International Quality and Productivity Council. Unlike the corporate-governance awards cited above that are based on subjective judgment, these operational delivery awards are based on actual customer experience. In addition, anyone who has visited the EMRI (Emergency Management and Research Institute) facilities in Hyderabad set up by Mr. Raju can vouch for the excellence in operational process discipline and delivery metrics followed.
These collective reasons indicate that Satyam's failure in corporate governance is not a structural issue about any significant delivery risk from Indian software houses. In saying that, I do not mean to diminish in any way the fraud committed at Satyam, or to try to portray it as any smaller sin. It is one of the biggest corporate governance scandals for India and it leaves lessons to be learned for all. It certainly calls for, at a minimum, a new layer of due diligence and checks by CIOs within their IT strategy for dealing with governance of their global resource partners. Moving Ahead
The swiftness with which the regulators have approached the Satyam case in the last few days underscores the significance attached to this far-reaching situation. It is very well known that the success of the software industry and exports in particular have been a catalyst in creating new jobs and the growth of the entire Indian economy in the last two decades. Hence, it is mandatory for the government and the regulators to maintain the transparency and swift action in the investigation of this case right through to conclusion. This is one way to instill confidence among global organizations currently outsourcing to Indian firms and among foreign investors, two groups who will be certainly be tracking the case very closely. It also is anticipated that PWC, the main auditors of Satyam, will be made answerable and possibly accountable either for negligence or collusion. We may recall that Arthur Andersen went down with Enron. Accordingly, it is expected that regulators and government will move on structural changes and in the Satyam reorganization with all appropriate haste.
In its strategy for pulling Satyam from this hole, the company's newly constituted board needs to balance carefully the interests of employees, customers, and investors. And while each of those groups' interests must be given all due consideration, the board must be sure not to short-change the Satyam employee base, a group of more than 50,000 who had absolutely no connection whatsoever to the financial scandal. The board must recognize clearly that the most important source of competence and knowledge in the software business is the people, and that for Satyam it is particularly critical to sustain current project teams so that they can avoid any major disruptions for the company's global customers.
In a historical context, Satyam follows other major cases of accounting fraud such as WorldCom, Parmalat, and Enron, indicating that this not about a specific industry or country. In the earlier cases, we did not adopt a global philosophy of questioning the performance of all telecom firms, food industry, or energy companies. While CIOs and their teams will need as noted above to re-evaluate governance policies toward outsourcing partners, we also should be very hesitant to question the validity of the entire industry because there is no evidence now telling us to do so. Indeed, what all these examples of accounting fraud have in common is that they came about for two reasons, one of which is personal -- greed -- while the other is institutional -- our capitalistic system's relentless focus on short-term quarterly financial performance.
Satyam serves in that regard as another reminder that while one can fool the system for some time, the problem will only intensify in the long term and the truth will be out eventually. This calls for more transparency in the system and processes, particularly as it relates to corporate boards. These examples expose how little boards of directors know about the actual details of their companies' operations. While no system can help guarantee integrity and values, perhaps corporate boards need to get closer to the reality of their businesses by looking at real-time system dashboards of company performance and cash balances, rather than being limited to static PowerPoint presentations decorated by management. While such steps might not eliminate such frauds, they will certainly leave an audit trail in systems and make investigations easier. It is clear that in infusing greater rigor into the systems, CIOs and IT have an important role to play in facilitating this much-needed increase in transparency and corporate governance. Should that come to pass, then perhaps Satyam's shameful experience will eventually lead to something good.
M. S. Krishnan is professor of business information technology at the Ross School of Business, University of Michigan. He also is co-director of the Center for Global Resource Leverage: India at the Ross School of Business. He is the co-author with C.K. Prahalad of The New Age Of Innovation (McGraw-Hill, 2008). He blogs about transforming business models on the New Age Of Innovation blog.
Copyright © 2007 CMP Media LLC
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Wednesday, December 31, 2008
GM sues bankrupt supplier Cadence over parts
NEW YORK, Dec 26 (Reuters) - General Motors Corp (GM.N: Quote, Profile, Research) has filed a lawsuit against a bankrupt auto-parts supplier, saying it is holding necessary equipment "hostage" which could potentially interrupt the launch of its new Chevrolet Camaro car.
In a lawsuit filed on Wednesday in U.S. Bankruptcy Court in Delaware, General Motors asked the court to allow it access to facilities of the supplier, Cadence Innovation, so it could obtain necessary tooling and parts for its plants.
Cadence, which makes door trim, instrument panels and air bag covers, filed for bankruptcy protection in August, but this month abandoned plans to sell itself and is now liquidating, according to court papers.
GM said it needed immediate access to the tooling, because it does not have enough parts on hand, and its vehicle assembly operations could be interrupted.
"Even one day's disruption in supply of certain Component Parts could cause a shutdown of GM assembly operations, disrupting not only GM's business, but the operations of countless suppliers, dealers, customers, and other stakeholders," GM said in the complaint.
GM said that such a shut down could cost millions of dollars per plant per day and it would need to have a successor supplier in place by Jan. 12 for the launch of the new Chevrolet Camaro.
GM said it had an accommodation agreement with Cadence that requires the auto-parts supplier to continue to manufacture the parts and provide tooling and equipment.
A Cadence lawyer and spokesman were not immediately available. (Reporting by Emily Chasan and Santosh Nadgir in Bangalore; Editing by Tim Dobbyn)
GM shares up, GMAC may be eyeing $6 billion loans
By Soyoung Kim and Karen Brettell
DETROIT/NEW YORK (Reuters) - Shares of General Motors Corp jumped on Friday after its auto finance affiliate GMAC won access to government lending programs, while analysts estimated GMAC might be seeking loans of more than $6 billion.
The Federal Reserve approved GMAC's status as a bank on Wednesday, giving the troubled finance company access to the Treasury-run financial bailout package, which may help GMAC avoid bankruptcy and continue financing of dealer and consumer loans for GM vehicles.
The news came less than a week after the U.S. government agreed to bail out GM and Chrysler LLC with $17.4 billion of emergency loans to provide liquidity and stave off collapse and massive job losses.
Analysts said the approval of GMAC as a bank further reduced the risk of bankruptcy for the No.1 U.S. automaker.
Underscoring the financial strains facing the U.S. auto industry, GM filed a lawsuit on Wednesday against a bankrupt auto-parts supplier, saying it is holding necessary equipment "hostage" and that could potentially interrupt the launch of its new Chevrolet Camaro car.
"It's significant in terms of GM's ability to move cars," said Erich Merkle, an analyst at Crowe Horwath.
"Things are still pretty ugly out there (in terms of sales) but in terms of GM possibly filing for bankruptcy, in my mind that's not going to happen. The reason I'm saying this is what they (the government) are doing with GMAC right now."
Shares of GM were up 13.54 percent, or 44 cents, at $3.69 on the New York Stock Exchange.
Bonds of GMAC LLC also rose, while the cost to insure GMAC's debt with credit default swaps plunged.
CreditSights said GMAC may have applied for up to $6 billion in funds from the government's $700 billion financial bailout program, and could potentially sell $17.5 billion in government-backed debt to shore up its capital position.
"While GMAC has not quantified its capital injection request from Troubled Assets Relief Program (TARP), we estimate the company could have applied for up to about $6.3 billion," CreditSights analysts Richard Hofmann and Adam Steer said in a report late on Thursday.
The analysts based their projections based on capital injections being limited to 3 percent of risk-weighed assets.
The bank status came before a debt swap deadline of 11:59 p.m. Friday. GMAC, owned by private equity firm Cerberus and GM, is looking to swap $38 billion of outstanding debt for a smaller amount of new debt, as well as preferred shares and cash, to reduce its debt load and raise capital.
"This opens the door to invest in the senior and subordinated debt," which are trading "at very attractive yields," said Andrew Brenner, an analyst at MF Global Inc in New York.
GMAC's 5.625 percent notes due in 2009 climbed to 94 cents, yielding 23 percent, versus about 73 cents on Monday, its last significant trade, when the note yielded almost 104 percent, according to MarketAxess data.
The cost to insure GMAC's debt with credit default swaps also plunged to around 24 percent the sum insured, or $2.4 million to insure $10 million for five years, plus annual payments of 5 percent. The swaps had traded at around 47 percent before the news.
GMAC TROUBLES
GMAC has struggled as the credit crunch raised its borrowing costs and the value of many of its assets plummeted.
It has lost $7.9 billion over the last five quarters and has said without bank holding company status, it would likely have to sell assets and take other extraordinary measures to make good on its obligations.
The lender's difficulties forced it to severely curtail financing for dealerships and for consumer purchases of new GM cars and trucks in recent months. The cutback in financing compounded the sales slump at GM, the No. 1 U.S. automaker, whose sales fell an eye-popping 41 percent in November.
GM Chief Executive Rick Wagoner said last week that GMAC's difficulties were "hammering" the carmaker's ability to sell vehicles.
GM dealers have depended on GMAC, North America's largest auto finance company, for financing their inventory and consumer purchases even after GM sold a 51 percent stake in GMAC to Cerberus in 2006 for $7.4 billion. GM retains the remaining 49 percent.
GM and Cerberus will have to trim their stakes to no more than 10 percent and 14.9 percent, respectively, to comply with Fed rules that are meant to prevent companies from using banks to fund their businesses.
Meanwhile, in the lawsuit filed in U.S. Bankruptcy Court in Delaware, GM sought access to facilities of parts supplier Cadence Innovation so it could obtain necessary tooling and parts for its plants.
Cadence, which makes door trim, instrument panels and air bag covers, filed for bankruptcy protection in August, but abandoned plans to sell itself and is now liquidating, according to court papers.
(Additional reporting by Walden Siew and Emily Chasan in New York, editing by Leslie Gevirtz)
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