GM learns from Chrysler bankruptcy

Posted on Tuesday, June 30th, 2009 at 1:03 PM EDT.

Efforts by General Motors Corp. to emerge from bankruptcy smaller but financially stronger hinge on a hearing that begins today in New York to approve the sale of the automaker’s best assets to create a new GM that will be majority owned by the federal government, The Detroit News reported.

The courtroom and overflow spaces in the U.S. Bankruptcy Court building are likely to be packed for the hearing, which could take the bulk of the week if similar proceedings a month ago involving Chrysler LLC’s asset sale to Italy’s Fiat SpA are any indication, the paper said.

Chrysler’s 40-day trip through bankruptcy is not a cookie cutter for GM’s experience, but lessons were learned that have affected the strategies the Detroit automaker is taking as it winds its way through court, the News said. Some creditors and others who oppose the asset sale also are learning from Chrysler objectors’ mistakes, the paper said.

GM already has benefited from watching the Chrysler case, the News said. The Detroit automaker completed its first-day motions earlier this month in two hours with few objections. Chrysler spent three fractious days on issues such as seeking an immediate sale hearing date and other procedures, which added time to its case and risked it missing a deadline it needed to complete a deal with Fiat or face liquidation, the story said. (The Detroit News)

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