General Motors files for bankruptcy protection

a�?General

US car giant General Motors (GM) has today declared itself bankrupt, symbolising the largest collapse of an industrial company in US history.

The move, which has the support of the US Government, was widely expected in the wake of plummeting car sales.

According to the Obama Administration, the US Government will take a 60% stake in the car maker, but according to President Barack Obama, the Government will become a “reluctant shareholder”.

The Chapter 11 bankruptcy protection will give GM the time to restructure its finances while being protected from its creditors.

In the meantime, it has been confirmed that the White House is going to inject a further $30 billion (A?18.5 billion) into the struggling car maker. So far, the company has received $20 billion in emergency loans since December.

The century-old car maker, which was once the biggest company in the world, is expected to be able to exit bankruptcy protection between 2-3 months.

GM’s chief executive Fritz Henderson announced today that “the GM that let too many of you down is now history”.

It is believed that the restructuring result in thousands of job losses as the group streamlines its operations. The group has a workforce of more than 170,000 across the US, Canada and Mexico.

While the bankruptcy protection will not affect is European operations (Germanya��s Opel and the UKa��s Vauxhall), there are fears over jobs in Germany and the UK.

An agreement has been reached that will see Canadaa��s Magna become Opel and Vauxhalla��s new owner but job cuts are expected.

Todaya��s move by GM follows that of fellow US car giant, Chrysler, who filed for Chapter 11 bankruptcy protection at the end of April.

The last of the a�?big threea�?, Ford, has so far avoided going into bankruptcy protection.

Tags: , , ,


Comments (1)

Trackback URL | Comments RSS Feed

  1. PrivateFleet says:

    In Australia, Holden (the local GM manufacturer) have just secured a $200m line of credit (that’s on top of $150m green car grant) but who knows how this tax payer money will be spent? Still too reliant on large car manufacture I think.