The 'Old GM' Just Ain't What She Used To Be. Or Is She?

July 28, 2010
GM's Hyatt Hills Golf Complex

GM's Hyatt Hills Golf Complex

Just over a year ago, General Motors Corporation was split in two: the potentially profitable half became General Motors Company (i.e. "Good GM"), and everything else became Motors Liquidation Company (i.e. "Bad GM"). So far, the good GM has been on a roll, cranking out new models, launching marketing campaigns, and paying off its debts. (Well, sort of.) But what's happening at Motors Liquidation? Apparently, not much.

Motors Liquidation was meant to oversee the disposal of burdensome GM assets, many of them land and facilities. At the time of its creation, the company was responsible for just over 200 properties valued at around $2.3 billion. Over a year later, 200 remain on the roster.

The problem? In many cases, the properties simply suffer from location, location, location. Other times, the facilities are too big to be transformed into anything useful for smaller organizations, or too decrepit to be renovated. And then, there are the brownfield sites, contaminated by toxic wastes.

The federal government loaned $1.175 billion to Motors Liquidation to tidy up its properties and to help cities and states clean up any environmental damage they'd caused, but unfortunately, much of that work has yet to begin. The company is in the process of putting together a trust to oversee such restoration; once that's in place, the cleanup, repair, and sale of sites may speed up.

Of the few GM properties that have been sold, the highest-profile has been its facility in Delaware, which was bought by startup Fisker to build its new Karma sedan. That sale was made possible, in part, by another low-interest loan, one that Fisker received from the feds to develop energy efficient vehicles -- the difference being that the feds may have a better chance of recouping its loan to the startup than from Motors Liquidation. We'll keep a running tally and get back to you.


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