RAY SUAREZ: Now, today
General Motors closed below $2 a share. Now this was
once the largest industrial corporation on planet Earth.
FRANK LANGFITT: Absolutely.
RAY SUAREZ: Did this signal that, even as G.M. is
asking for more money, that there's a really substantial
question about whether it can survive just the next
FRANK LANGFITT: I think it is very much up in the
air. And what's going to be really interesting is
to see what the White House task force does as they
look at this issue going forward.
They have this month to work with the bondholders,
the United Auto Workers, to try to get G.M.'s cost
down so that they can continue to move forward. And
only if the White House task force thinks that they're
really viable going forward will they be able to get
more government money.
RAY SUAREZ: Let's talk about the bondholders and
the union. Now, the bondholders, obviously, are holding
a substantial amount of G.M. debt. They met with the
Obama task force this week. Do you know anything about
FRANK LANGFITT: Well, I think they're very tough
conversations. The bondholders, like all the other
stakeholders in this, they want to cut the best deal
that they can. And one thing that they're concerned
about, they want to stay out of bankruptcy court,
because a bankruptcy judge can be a little like Solomon.
A bankruptcy judge can really enforce terms that are
kind of outside the political arena.
So, right now, they're trying to work with G.M. and
with the task force to get the best deal they can.
What G.M. wants to do is give stock in exchange for
payment on the bonds. But, of course, as you just
mentioned, that stock is continuing to fall, so the
bondholders are worried about how much they're really
going to lose here.
RAY SUAREZ: What about the United Auto Workers? Didn't
G.M. borrow heavily from their retirees' health care
FRANK LANGFITT: The big issue on retiree health care
is this. Over time, G.M.'s going to owe United Auto
Workers about $20 billion. It made a deal more than
a year ago to offload the health care retiree benefits
to the union. Now it doesn't have the cash to pay
that, so, again, it's offering stock.
The United Auto Workers are also very concerned.
You know, they want to make sure that they have money
to take care of their retirees.
RAY SUAREZ: So are suppliers, are parts companies
starting to get the G.M. contagion? Are they in as
much trouble as the company now?
FRANK LANGFITT: That's a really big story that hasn't
been covered enough. Some of the suppliers are beginning
to edge towards bankruptcy. And their concern is that,
with these falling auto sales, it's this upstream,
you know, impact, that if there are fewer cars being
sold, there are fewer parts.
And so they're actually -- as you well know -- they're
actually asking for the Treasury Department for a
lot of money, too, to get them through this period.
RAY SUAREZ: NPR's Frank Langfitt, thanks for joining
FRANK LANGFITT: Happy to do it, Ray.