GM stops sharing with others

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General Motors Corp.‘s bankruptcy plan -- to overhaul the company’s balance sheet and dump $57 billion in debt -- will finally do away with those brutal quarterly reports, stained blood red with yet another multi-billion-dollar loss.

That’s because GM won’t be issuing them anymore.

The automaker said today that it would no longer file most financial statements, including 10-Ks, 10-Qs, 8Qs and the like -- for the foreseeable future. It won’t have to.

That’s because GM will use bankruptcy to sell its assets to an entity it calls ‘New GM.’ And unlike the GM we all know and love (or love to hate), the New GM will not be publicly traded. At least not yet.

Publicly traded shares in GM ceased trading on the New York Stock Exchange on Tuesday (they’re still available on the pink-sheets exchange, ticker GMGMQ, where they last traded at 62 cents per share). Once the court-ordered asset sale is accomplished, current shareholders in the ‘old GM’ will be wiped out...

GM’s interim chairman, Kent Kresa, said that he was cancelling the company’s annual shareholders’ meeting in August and is selecting a new board that will not, obviously, be up to shareholder approval.

There will only be four owners of the new GM: the U.S. government, with a 60.8% stake, the governments of Canada and Ontario (11.7%), the United Auto Workers union (17.5%), and former holders of GM bonds (10%) who agreed to swap their debt for equity.

Although the new company will go public -- it needs to for the government to unload its stake, a priority for the Obama administration -- that won’t happen for some time. GM’s chief financial officer, Ray Young, said in an interview this week that he hoped to return to the public markets in the first half of next year.

What this means is that GM will be a privately held company, and it won’t have any publicly traded bonds. And private companies without bonds are under no obligation to report anything.

That was the case with Chrysler when it was purchased by Cerberus Capital Management. Financial statements on the company essentially disappeared, except what could be presumed through careful parsing of the books of Daimler, the automaker’s former parent company.

Of course, every time anyone did the math to figure out just how much money Chrysler had lost, the Auburn Hills-based automaker loudly denied that it was true. And look where that got it.

Then again, GM’s principal owner isn’t a shadowy New York private equity fund with a secretive owner -- it’s our dear Uncle Sam. And given the regularity of ‘business updates’ from new GM Chief Executive Fritz Henderson, don’t expect radio silence either.

Indeed, in its statement today, GM hardly said it would turn off the information spigot, promising ‘appropriate information regarding our financial condition.’

The only question is: just what in the devil is appropriate about GM’s financial condition, anyhow?

--Ken Bensinger

By: Richard Drew/AP Photo