GM Files Chapter 11

Can General Motors Corp. be saved? The Obama administration seems to think so. According to
the Associated Press, GM filed for Chapter 11 bankruptcy protection as part of the
Obama administration’s plan to downsize the company to a sustainable size and to give the
United States the majority stake to get the industrial giant back on its feet. The plan is
for the federal government to take a 60-percent ownership stake in the new GM. The Canadian
government would take a 12.5-percent stake, with the United Auto Workers getting a
17.5-percent stake and the company’s current unsecured bondholders receiving 10 percent,
and existing GM shareholders are expected to be wiped out. GM is expected to come out of
this as a leaner company with fewer workers, less debt and fewer brands – yet more
vivacious and prosperous. Its future brands will be limited to Chevrolet, Cadillac, GMC and
Buick. The company plans to either sell or close its Pontiac, Saturn, Hummer and Saab
brands. The company said it has $172.81 billion in debt and $82.29 billion in assets.
There’s a possible $30 billion of additional financial assistance from the Treasury
Department as it reorganizes, and that’s on top of about $20 billion in taxpayer money GM
already has received in the form of low-interest loans.