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

GM’s challenges could be too large

DETROIT — Bankruptcy protGeneral Motors Corp. CEO Fritz Henderson still is holding out hope that the company can restructure without court protection, but he says the tasks to complete before a June 1 government-imposed deadline are large.

The automaker, Henderson said, is looking at its operations country-by-country to determine where it might have file for bankruptcy.

"Certainly the task that we have in front of us is large,” Henderson said during a conference call. "There is still an opportunity and still a chance for it to be done outside of a court process.”

GM shares fell 17 cents, or 10.6 percent, to close at $1.44.


Deadline nears
General Motors has received $15.4 billion in federal loans, and the government deadline to restructure or seek Chapter 11 protection is just over two weeks away.
However, the company must reach concessionary agreements with unions, persuade thousands of bondholders to exchange $27 billion in debt for 10 percent of GM’s stock, cut thousands of dealers, close plants and lay off more salaried workers.

Under Chapter 11 reorganization, a company can stay in operation under court protection while sheds debts and unprofitable assets to emerge in a stronger financial position.

Also Monday, Henderson left open the possibility that GM would move its corporate headquarters out of Detroit.

The company, he said, is looking at everything within its business.

He would not comment about reports about Fiat Group SpA’s interest in getting 80 percent of GM’s European Opel operations, saying that any structure must address the needs of both partners.

Henderson said GM has an urgent need for funding from the German government, so any partner for its European operations would have to be suitable to the government.
Section for the nation’s biggest automaker is becoming more probable with a deadline just over two weeks away, the company’s top executive told reporters Monday.

by the associated press

Gm Rethinks Bankruptcy

General Motors Corp , is softening its opposition to bunkruptcy reorganization a little more .

" If its required , that's what we'll do " New Cheif Exective Fritz Henderson said. Gm still prefers to avoid bankruptcy protection while restructing , Herderson said in an interview broadcast Sunday.