The Car and Truck Fleet and Leasing Management Magazine

Market Trends

Fleets Stand Behind GM in Chapter 11, But Questions Linger

June 2, 2009, by Mike Antich - Also by this author

By Mike Antich

On June 1, General Motors Corp. and three domestic subsidiaries filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. This was 32 days after Chrysler  LLC filed for Chapter 11 bankruptcy protection. 

Most fleet managers say they anticipated GM would enter Chapter 11. "This is not a surprise, nor will a lot change for us right now in terms of our selector," said one Midwest fleet manager. Another fleet manager echoed this sentiment. "This doesn't change my plans too much. It didn't come as a surprise. I received a letter from Jim Campbell (general manager of GM Fleet & Commercial Operations) reiterating GM's commitment to fleet going forward," said a fleet manager on the East Coast.

Other fleet managers, despite anticipating the announcement, still expressed disbelief about the reality of the situation. "I've been with GM for over 30 years, and quite frankly, I can't believe this actually happened," said one fleet manager.

Some fleet managers expressed sadness over the announcement. "It's very sad that it has come to this. GM had an enormous influence on the vehicles people chose for years and years.  The cars GM has been producing in the last couple years have been excellent vehicles. I feel bad for the employees and all the other companies and people affected by the bankruptcy," said one fleet manager.

One consequence of the Monday morning announcement was a flood of questions to fleet managers from their management about the impact of GM entering Chapter 11.

One favorable perception as to when GM could re-emerge from Chapter 11 is being influenced by how quickly Chrysler is progressing through its Chapter 11 reorganization.

"The Chrysler process seems to be going well, and I am fairly optimistic about GM's ability to come out of bankruptcy prior to 2010 as a viable organization," said one fleet manager.

To determine what impact GM's decision to enter Chapter 11 will have on commercial fleets, Automotive Fleet magazine conducted a survey June 1 of General Motors' largest commercial fleet customers. Although responses varied, one common denominator cited by most commercial fleet managers was their willingness to stand behind GM. One example is AT&T, which wrote: "GM has been a valued supplier to the AT&T fleet for many years. We don't anticipate any changes at this time to that relationship based on the announcement."

Most fleet managers responding to the survey said their 2010 selectors for North America will not change, but they are taking a wait-and-see approach as to how GM progresses through its reorganization. Another common response from fleet managers was that GM products best served the needs of their fleet applications.

"At this time, I do not see GM entering Chapter 11 impacting our fleet or our 2010 selector list," said one fleet manager. "One of the primary reasons it will not is because a number of GM products meet our business needs better than any other alternative. But we will continue to closely monitor this situation and make any changes as necessary."

Product loyalty was another factor cited by many commercial fleets. "This will probably have no effect on our fleet selector. We have great experiences with GM and will stay with them until it looks dim. Everything I have seen and heard seems to say business as usual for right now. GM still gives us the best bang for our buck versus the foreign vehicles," said one fleet manager.

Many fleet managers say it will be "business as usual" in their dealing with GM during the Chapter 11 proceedings. "Although I do not have any 2009-model vehicles on order from GM, I believe they will carry on as promised with their production schedules," said one fleet manager of a 1,000-plus fleet in the Northeast. "I expect GM will continue to service our vehicles under warranty, provide GM parts and service as needed for our out-of-warranty vehicles, and reassert their commitment to the commercial fleet market."

However, some fleet managers expressed uncertainty as to what impact GM's Chapter 11 filing will have on their fleet. One concern dealt with fleet warranty coverage and out-of-warranty goodwill repairs. "In the news, you hear the government will back the warranty during the reorganization process, but will that include fleet vehicles?" asked one fleet manager. In response to this concern, GM reported June 2 that it has received U.S. Bankruptcy Court approval to continue honoring all vehicle warranty programs, fleet and dealer incentive plans.

Although fleet managers received a letter from GM stating there should be minimal impact on their fleets in North America, there is uncertainty among some multinational fleets. They express uncertainty about the impact of this announcement for their fleet operations in Europe and Australia. 

Other fleet managers are exercising what they term "due diligence" and formulating alternative sourcing scenarios. "We are taking a wait-and-see approach, but we have taken steps to be ready for several outcomes.  Right now, a sensible review of all options and scenarios is best to prepare us for the future," said one fleet manager.

Another fleet manager said General Motors' filing for Chapter 11 bankruptcy protection will not impact his relationship with the OEM. "We have been assured our fleet units will be built. We are already experiencing build delays on all of our selectors so that's not a big change for us right now. I do not see this as having a huge impact on my fleet in the onset. However, we have already written a contingency plan and built upfit specs for Ford just in case, but we don't plan, at this point, to use them."

Another fleet manager likewise voiced support for General Motors, but indicated he was exercising due diligence. "I will continue to include GM vehicles in my 2010 selector, but will probably have a second selector list including Ford equivalents as a back-up, just in case things do not go as planned."

Some fleet managers indicated that GM's Chapter 11 announcement will influence their selector development for the 2010 model-year.  "I'm already in contact with another manufacturer and negotiating an incentive program," said one fleet manager.

Although several fleets said they will change their fleet vehicle sourcing, the overwhelming majority of commercial fleets responding to the survey stated they intend to continue to order from GM and expressed confidence GM would re-emerge quickly from Chapter 11 reorganization.

"We have spoken to nearly every GM fleet customer in the past 24 hours, and what we've heard has been overwhelming support of GM, our products and our people. I can't tell you how much that means to us," said Jim Campbell, general manager of GM Fleet & Commercial Operations.


The New GM

Led by GM's current management team, the "New GM" is expected to launch in about 60-90 days as a separate and independent company, incorporating the terms of GM's recent agreements with the United Auto Workers (UAW) and Canadian Auto Workers (CAW) unions. GM operations outside the U.S. are not included in the U.S. court filings or court-supervised process, and these filings have no direct legal impact on GM's plans and operations outside the U.S.

Under its April 27 viability plan, GM will sell substantially all of its global assets to the New GM. GM dealers will continue to service GM vehicles and honor GM warranties, and U.S. and Canadian governments will guarantee the manufacturer's warranties. GM will focus on its four core brands in the U.S. - Chevrolet, Cadillac, Buick, and GMC.

GM also reaffirmed its commitment to improve the fuel efficiency of its vehicle fleet, meet or exceed new federal fuel economy and emissions regulations, and push ahead with advanced propulsion technology. GM will continue toward its 2010 launch of the Chevrolet Volt extended-range electric vehicle and expects to have 14 hybrid models in production by 2012, with 65 percent of vehicles alternative-fuel capable by 2014.

More information about GM's chapter 11 cases is available at

Court filings and claims information are available at


Let me know what you think.


  1. 1. Pete Kilduff [ June 03, 2009 @ 07:15AM ]

    What are Gm's plans concerning the duplicity of GMC and Chevy truck models and the loss of an engine for the medium duty truck line?

  2. 2. Brian Goebel [ June 17, 2009 @ 10:21AM ]

    "There are differences in design with the hoods, grilles, wheel flares, and more. They are also packaged slightly differently. Many customers simply prefer the look of the GMC over the Chevy, and vice versa. Having a GMC truck line also helps our BPG dealer network with their customers. There is a clear market for both brands." - Brian Goebel, Chevrolet Communications

Comment On This Story

Email: (Email will not be displayed.)  

Comment: (Maximum 10000 characters)  
Leave this field empty:
* Please note that comments may be moderated.

Fleet Incentives

Determine the actual cost of owning and running a vehicle in your fleet. Compare vehicles by class and model.

Sponsored by

Azure Dynamics Corporation is a  leader in the development and production of hybrid electric and electric components and powertrain systems for commercial vehicles.

Read more

Author Bio

Mike Antich

Editor and Associate Publisher

Mike has covered fleet management and remarketing for more than 20 years and entered the Fleet Hall of Fame in 2010.

» More

More From The World's Largest Fleet Publisher