GM Bondholders Submit Own Plan

GM's new survival plan, presented at the beginning of the week along with the manufacturer's debt for equity, has displeased its bondholders in such an extent that now they have drafted their own survival plan for the company. In GM's plan, bondholders would get a 10 percent ownership in the new GM, while the US would own 89 percent.

The new plan, drafted by a bondholder committee, has not been detailed, as a person familiar to the plan said it has not been yet submitted. The committee will forward the plan to the White House auto task force overseeing the restructuring of the manufacturer.

As they already said, the bondholders consider GM's offer "neither reasonable nor adequate", as well as a "blatant disregard of fairness for the bondholders."

So far, GM's only course of action has been to warn, through the voice of its new CEO, Fritz Henderson that in case the bondholders do not swap 90 percent of the $27 billion they are owed, GM will go into Chapter 11, Reuters reported.

The same public exchange offer submitted by GM has already been approved in Europe by the United Kingdom Listing Authority. The prospectus of the offer will be available in the United Kingdom, Austria, Belgium, France, Germany, Italy, Luxembourg, the Netherlands, Spain and Switzerland.

The American manufacturer has also drawn the criticism of the National Automobile Dealers Association (NADA) in respects to their decision to kill Pontiac. According to NADA, 137,330 people will lose their jobs because of the closure of dealerships.

"We feel a strong sense of disappointment that GM has, for whatever reason, decided to accelerate dealer consolidation in such a drastic way," John McEleney, NADA chairman said in the release.