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Dayton would not escape pain of a GM bankruptcy

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By By Thomas Gnau, Staff Writer Updated 11:11 PM Thursday, May 28, 2009

General Motors is sweetening its offer to bondholders, offering them a stake in a “new GM.”

Essentially, bondholders would have an chance to buy a total 25 percent of a restructured GM — 10 percent equity with warrants to purchase another 15 percent at a discount.

“It’s certainly a step up from the (initial offer of) 10 percent,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor, Mich.

“Implementation of this proposal would result in a new GM with a healthy balance sheet, putting the new company on a clear path toward long-term viability and success,” GM said.

GM still is expected to seek bankruptcy court protection by Monday.

“Is this going to eliminate bankruptcy? I doubt it,” Cole said.

Though Dayton no longer has an operating GM plant, the area would not escape the pain of a bankruptcy filing.

Though most local Delphi Corp. plants have closed and GM closed its Moraine SUV assembly plant late last year, the company still co-owns the DMAX truck engine plant, also in Moraine, with Isuzu. A Tenneco plant in Kettering and an Inteva Products facility in Vandalia also are tied to GM. As well, thousands of salaried and retired GM retirees remain in the Dayton area, and there are more than 20 GM auto dealerships in Montgomery County alone.

“It’s suppliers and contractors who provide goods and services to GM,” said Jeff Morris, a University of Dayton bankruptcy law expert. “They’re all going to feel a hit.”

Terry Miller, a GM salaried retiree who lives in Vandalia, finds himself concerned about his pension.

“I feel at least part of it is in jeopardy, maybe all of it,” said Miller, who worked for GM for more than 28 years.

Then there also are real estate issues, said Joe Tuss, Montgomery County assistant administrator.

“One of the issues will be how the bankruptcy will affect the closed facilities and the real estate the company owns in the Dayton area, and most specifically in Moraine,” Tuss said.

Moraine alone finds itself with some 300 acres of former industrial space, land once occupied by Delphi (off Dryden Road) and GM (between Kettering Boulevard and Ohio 741).

Contact this reporter at (937) 225-2390 or tgnau@DaytonDailyNews.com.

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