We the People , shall own 60 percent of GM

WASHINGTON — General Motors, the humbled auto giant that has been part of American life for more than 100 years, will file for bankruptcy protection today in a deal that will give taxpayers a 60 percent ownership stake and expand the government’s reach into big business.

Underscoring the government’s extraordinary role, President Barack Obama planned to announce his support for GM’s restructuring strategy at a midday appearance.

GM president and CEO Fritz Henderson planned to hold a press conference following Obama’s announcement.

Administration officials said late Sunday the federal government would pump $30 billion dollars into GM as it makes its way through bankruptcy court. That’s besides the $20 billion in taxpayers’ money that the Treasury already lent to the automaker.

The money would come from what remains of the $700 billion rescue fund for the financial sector.

The officials said the administration expects the court process to last 60 to 90 days. If successful, GM will emerge as a leaner company with fewer plants and a trimmed dealership force.

On Sunday a group of large, institutional bondholders, representing 54 percent of GM bondholders, agreed to exchange their unsecured bonds for a 10 percent stake in a newly restructured company, plus warrants to purchase a greater share later.




by the associated press

GM bankruptcy prospect could be settled this week

DETROIT — General Motors Corp.’s board of directors met for a second day Saturday to make the final decision on whether the automaker would complete its restructuring by filing for bankruptcy protection Monday.

The meeting’s outcome could not immediately be determined. GM and the Treasury Department, which has been guiding the automaker toward a rescue plan that will give taxpayers nearly a three-fourths company stake, went into secrecy mode.

GM’s bondholders had a 4 p.m. CST Saturday deadline to accept an offer to swap their $27 billion in debt for at least a 10 percent stake in a new GM. If the Treasury doesn’t get the amount of support it wants, bondholders could wind up with far less in bankruptcy court.

The Treasury Department had no immediate comment on the deadline passing, and company spokesman Tom Wilkinson said the automaker did not plan to make any statements Saturday.

GM took a huge restructuring step Friday when the United Auto Workers union agreed to a cost-cutting deal, and early Saturday, Germany’s finance minister said a plan was approved for Canadian auto parts maker Magna International Inc. to move ahead with a rescue of GM’s Opel unit.

But there was still much to do to beat the government’s Monday deadline to qualify for more aid. The company already has received about $20 billion in government loans and could get $30 billion more to make it through what is expected to be a 60- to 90-day reorganization in bankruptcy court.



by the associated press