GM Bankruptcy Update

General Motors (GM) has gone through its first couple days in bankruptcy. The main issue was for $33 billion in funding from the US Government being approved. The company also sold its Hummer division to a Chinese concern for an undisclosed amount. There are 16 bidders for Saturn and 3 bidders for Saab. Announcements on these two brands may come soon. Restructuring may occur at a rapid pace.

The creditors list has been filed. Main creditors include: Delphi (DPHIQ) ($111 million), Lear (LEA) ($45 million), Johnson Controls (JCI - Analyst Report) ($33 million), TRW (TRW - Analyst Report) ($28 million), Magna International (MAG - Snapshot Report) ($27 million), American Axle (AXL - Analyst Report) ($27 million), Tenneco (TEN - Analyst Report) ($15 million), Visteon (VSTN) ($10 million), US Steel (X - Analyst Report) ($10 million), AK Steel (AKS - Analyst Report) ($9 million) and Goodyear (GT - Analyst Report) ($7 million). Auto suppliers will be impacted greatly by this filing.

Overall, the bad news is out and we upgraded the Auto group from underweight to neutral just 2 days ago.