It's tough for stockholders since the deadline to submit proposals is before the loans are resolved.
General Motors Corp. has pushed back the date of the company’s annual meeting unit August. For decades, GM has held its annual meeting in the spring, but this year determined that both the company and shareholders would be served better if the meeting was delayed. The place changes too. The meeting will be held in Detroit rather than Wilmington, Delaware, where the shareholders have meet for the past several years.
“Primarily it’s because the board felt they would be in a better position to give some perspective on the progress we’re making on our restructuring,” said GM spokeswoman Julie Gibson. We’ve got a lot going on right now,” she added.
GM’s top management has until March 31 to submit the finished version of the company’s viability for review by the U.S. Treasury Department. The Treasury Department will then decide whether GM will qualify for loans from the U.S. government.
However, key elements of GM’s plans are still incomplete.
GM has not finished negotiations with the United Auto Workers. The union has agreed to a series of concessions similar to those it negotiated with Ford but has held off on approval of a plan that would change the financing of the voluntary employee benefit association or VEBA. The union is unlikely to sign off an agreement, if GM can’t show any progress in its negotiations with bondholders. And bondholders appear to be waiting until the last minute to get a better deal.
As a practical matter, the deadline for reaching an agreement that could be ratified by union members is this coming weekend. Otherwise, GM will probably have to present Treasury with plan that includes a substantial part that is still un-ratified by union members. It usually takes about 10 days for UAW members to vote on contract changes. Cutting the time could provoke a backlash.
Gibson said talks with bond holders are proceeding but declined to comment on whether any progress is being made. One of the advisors to the bondholders, which include pension and mutual funds, said Tuesday that a framework for a potential settlement is now on the table.
“The framework we set forth is one of several options on the table that seeks to achieve a successful out-of-court restructuring, and we look forward to discussing the merits of any proposal that brings about the fundamental changes necessary to position GM for long-term success” said Gabe Roth, an advisors to an ad hoc committee of GM bondholders.
“We continue to believe that the best result for all stakeholders – and for the American economy – is a viable, competitive GM. We stand ready to do our part to bring about a workable solution,” he concluded.
Meanwhile, the deadline for submitting stockholder proposals will be March 31, 2009, and the deadline for submitting stockholder board nominations is April 6, 2009. GM disclosed its 2008 executive compensation in its annual report on Form 10-K, filed on March 5. Stockholders of record as of June 12, 2009 are eligible to vote at the annual meeting; proxy materials will be mailed in June.