The Treasury Department is directing General Motors to lay the groundwork for a bankruptcy filing by a June 1 deadline.

The goal is to prepare for a fast “surgical” bankruptcy, the people who had been briefed on the plans said. G.M., which has been granted $13.4 billion in federal aid, insists that a quick restructuring is necessary so its image and sales are not damaged permanently.

Treasury officials are examining one potential outcome in which the “good G.M.” enters and exits bankruptcy protection in as little as two weeks, using $5 billion to $7 billion in federal financing, a person who had been briefed on the prospect said last week.

The rest of G.M. may require as much as $70 billion in government financing, and possibly more to resolve the health care obligations and the liquidation of the factories, according to legal experts and federal officials.

Of course, GM could theoretically reach an agreement with the UAW and GM bondholders to exchange roughly $28 billion in debt into GM Equity before the deadline, but I’ll not start holding my breath now.

Apparently Rick had agreed to come on Jon Stewart’s “Daily Show”, but then canceled at the last minute.  Jon changed things up and instead of scheduling another guest, he delivered a scalding commentary on Wall Street’s hypocritical opposition to the homeowner bailout and on CNBC themselves.

You can watch the 8 minute clip here, thanks to Consumerist.com.

Jon Stewart on CNBC, Rick Santelli

It is a sad commentary on the state of the Nation and the Media when it takes a commedian to point out the foolishness that has been taking place.

A lot of optimistic people bought houses near the historic height of the market, say November 2005, for absurdly high prices, say $1.12 million, in places like the eastern Hollywood Hills section of Los Angeles. These people are very, very sad. Trust me on this. But the sudden drop in housing prices hasn’t made it any harder for these people to pay their loans. That’s because your home’s value is utterly irrelevant until you want to sell it…

…The only people affected by plummeting real estate prices are the ones who bought a house that cost more than they could afford, hoping for a spike in value so they could sell at a profit or take out a new loan based on an increased value. Their home wasn’t just a place to live; it was an investment they thought they could liquefy at will. If we’re saving these poor souls from the 26.7% drop in their investment, we should give twice as much aid to everyone who has lost approximately 50% in the stock market since its peak.

My wife and I bought a house we could afford, we drive pre-owned cars, we perform in depth price comparisons while shopping for anything, and then we wait for the item to go on sale before actually buying it.

Due to massive amounts of underemployment/unemployment, we’ve been forced to work with roughly half our regular income for the last 3 years.  We made adjustments, cut expenses, and somehow managed to not make any late payments.  But we’re now deeper in debt than we were, and even though we did the right thing and managed our finances responsibly, there’s not much we can look forward to receiving in the way of relief.

If we reimbursed people who lost cash on risky investments — or “subsidize the losers’ mortgages” — we’d create a moral hazard, telling everyone there’s no risk to gambling. It’s why parents fight their instinct to save their kids from the consequences of their mistakes.

Alas, today after making public the company’s Viability Plan, GM announced that the High Performance Vehicle Operations Team will be dismantled, its members moving to other departments.

“All high-performance projects are on indefinite hold. – Vince Muniga, GM Spokesman

No doubt it was a foolish hope of mine, but after seeing the the performance of the V-Series Cadillacs, and seeing the teams potential in cars like the Chevrolet Cobalt SS and the HHR SS, I was looking forward to what else might come from these talented engineers.  I still firmly believe that domestic automakers should need to compete on the same playing field as their import competitors, and that includes comparable small performance automobiles that are within reach of the average buyer.

As for the Plan itself?  GM is requesting an additional $16.6 billion, bringing the total amount of money lent to $30 billion if approved.  GM proposes that they will be able to start repaying the loans in 2012, assuming all goes as planned.  HUMMER will be sold or phased out, SAAB will request assistance from the Swedish government (and will be filing bankruptcy at the end of the month if no agreement with Sweden is reached), and as for poor Saturn…  the brand will be laid to rest in about 3 years when the current product cycle ends unless the dealers and investors can come up with a way to sell it or spin off the line into something else.

Going forward, GM will mainly focus on the Chevrolet, Cadillac, Buick and GMC brands, with Pontiac morphing into a niche brand with fewer models.

Only time will tell if it’s enough to save GM.

“One plan includes a Chapter 11 filing that would assemble all of GM’s viable assets, including some U.S. brands and international operations, into a new company,” the newspaper said. “The undesirable assets would be liquidated or sold under protection of a bankruptcy court. Contracts with bondholders, unions, dealers and suppliers would also be reworked.”

Citing “people familiar with the matter,” the story said that GM could also ask for additional government funds to stave off a bankruptcy filing.

GM has declined to comment at this time, but has already announced layoffs of nearly 15% of company employees, and pay cuts for those remaining.  This is not the first time that of Chapter 11 has been mentioned here, but with restructuring negotiations between bondholders and the UAW unlikely to end before the deadline, GM is likely running out of time.

A former employee of Cash4Gold weighed in over at Complaintsboard.com with insider information about how the company works.  Not surprisingly, he claims that the entire operation is nothing but a glorified scam, and breaks down the entire process for us.

We do offer a 100% Satisfaction Guarantee or your jewelry returned, BUT THE CATCH IS, that the guarantee is to contact us within 10 DAYS from when your check is DATED. (This begins with the time it took for the accounts payables dept. to ISSUE the check and also including the TRANSIT TIME for you to receive your check in the mail. **** NOTATE THE COMMERCIALS THAT INSINUATE THAT YOU GET YOUR CASH IN 24 HRS.*** If you request (sign) for FAST CASH (direct deposit) you automatically WAIVE your rights to have your items returned, EVEN if you are not satisfied with amount of your deposit.

You generally receive your check around the “7th-10th” business day, AND majority of the time Customers are outraged when they lay eyes on the amount of their check. Some Customer’s even receive a check for 0.01 cents.

We issue low checks just to have you call us back if you are smart enough to realize that you just got scammed. For the smart one’s we are paid to offer u a bonus up to 3x the original amount of your check and you accept. For ex: Sally Smith receives a check for $27.86 for a Rolex watch(which we don’t issue value for), a class ring, a ring with diamond chips, a pair of earrings with emeralds, as well as a few sterling silver pieces, and maybe a few items that were really of no value. Now Sally Smith calls the cust srvc dept, where she speaks to a rep who seems so concerned and will see if she can do better with the amount by speaking to a “SUPERVISOR”. We then place the caller on Mute, and speak to our neighbors or doodle on a sheet, or twiddle with our hair for about 45 seconds, while we are supposedly speaking to our supervisor about Ms. Smith’s complaint. We then come back with an offer to “BUMP UP YOUR MELT DATE or any other lies the cust srvc reps can think of, and offer you a total amount of $53.20 which is a little under double the amount of your original check; in which case if you accept, the cust srvc rep makes a 15.00 bonus off of your transaction. If the customer service rep offers you under triple the amount of your orig check, he/she makes 10.oo in bonuses.

There’s quite a bit more over at the Complaintsboard.com, where our anonymous  former employee goes into further detail about how things work, and 4 pages worth of other posts complaining about Cash4Gold.  It’s well worth the read if you have a few extra moments, and can also be found in a repost at the Comsumerist.com.

But that is not the end of our story – it seems Cash4Gold has been contacting bloggers and offering to  pay for the removal of negative postings.  Rob over at Cockeyed.com was contacted and offered a “few thousand” to take down his negative posts about the company:

Rob,
I work with Cash4Gold on the reputation management. Your article is ranking #3 on their brand term. They would really like to make it worth your while to take it down or make it more positive. They did something similar by joining (OTHER CONSUMER AFFAIRS WEBSITE)’s advocacy program. Is it worth a few thousand to take it down? If not, maybe a donation to your favorite charity is more to your liking?

Feel free to call me anytime to discuss further.

Thanks,
Joe Laratro
President
Tandem Interactive – Trendy Online Marketing Solutions
Hollywood, FL 33020

Amazing.

“This is the only possible path for our company,” Circuit City’s acting Chief Executive James A. Marcum said in a statement. “We are extremely disappointed by this outcome.”

It is still unclear what will happen to the 765 retail stores and outlets in Canada, as there are still bids for the Canadian business.

(from Barron’s and Yahoo/AP)

While the loss of these jobs is horrible and couldn’t come at a worse time, in my personal experience Circuit City never came close to performing as well as its competitors and sadly, this is the end result.

The painful truth companies must face is that no longer will customers continue to put up with bad service, high prices and poor selection, and with the economy growing worse daily, that will not be changing any time soon.

“We have to re-engineer the way we’re doing business in many regards,” Clarke said. “We’re going to be a smaller company.”

Pontiac also will be shrinking, Vice Chairman Bob Lutz told reporters today.  It’s line will be reduced down to just the G8, the G5, the Vibe, the Solstice and the Solstice hardtop coupe.

Saturn – who hasn’t made a profit since 1993 – is being looked at closely as well, said Clarke.

We’ve entered into a very, very open and candid dialogue with our Saturn retailers, it just hasn’t been a good business for us.  We need some breakthrough options here, we can’t continue brands that have no prospect of earning their way.

Between this and the news of GM selling off 250 vehicles from their their private “Heritiage Collection”, it seems GM has seen the light and is ready to make changes.  Let’s hope it’s not too little, too late.