U.S. Enters Clean-up Settlement with Old GM “Thinking Outside the Box”

The U.S. and the former General Motors Corporation known as Motors Liquidation Co., reached a $773 million agreement allocated to clean-up eighty-nine RCRA and Superfund (CERCLA) Sites in fourteen states. This agreement was made possible since the taxpayer who once owned 60% of the former company had leverage to demand clean-up and GM wanted to go public; thereby ridding itself of federal government oversight. The majority of the money came from the $1 billion the Obama administration gave the former GM Co. The funds will accomplish two important aims: clean-up old polluted sites and provide stimulus money to hard hit local communities to accomplish these goals. It is interesting to note that the reported $120.8 million designated for the Central Foundry Division in Massena (see my EFIS Letter to Elected Officials blog) was right on the mark. However, General Motors isn’t out of the woods yet. General Motors is a responsible party to a number of multi party Superfund Sites. It won’t be until next year that we know what their annual stockholder equity will be; and in turn, the threshold for material impact on earnings (4% of stockholder equity).