IMPACT OF GM’S BANKRUPTCY

Abstract

GENERAL MOTORS’ bankruptcy, the largest ever by a U.S. manufacturer, won’t have as big an impact on the chemical industry as the precipitous decline in U.S. auto sales already has had, experts say. GM plans to emerge as the “new GM” in 60 to 90 days. It will have new owners, the largest of which will be the U.S. government, with a 60.8% stake. The governments of Canada and Ontario will have an 11.7% share, the unions will have a 17.5% stake, and the balance is going to unsecured creditors. No chemical firms are named as major creditors in the bankruptcy filing. But the list includes parts suppliers—such as Delphi, Lear, and Johnson Controls—that buy plastics from chemical companies. The economic downturn slammed the automotive industry, which already was severely struggling with its finances, says T. Kevin Swift, chief economist at the American Chemistry Council, an industry trade group. “The extent of the downturn surprised ...