Thaindian News

American automobile maker General Motors became the largest US corporation to file for bankruptcy when it filed papers with a federal clerk in Lower Manhattan today.

The Chapter 11 bankruptcy filing, part of a restructuring plan nutted out late last week, will see the US Federal Government owning 60 percent of the American icon and the Canadian Government 12 percent.

In its bankruptcy petition, GM said it had $US82.3 billion in assets and $US172.8 billion in debts.

Its largest creditors were listed as Wilmington Trust Company, representing a group of bondholders holding $US22.8 billion in debts, and affiliates of the United Auto Workers union, representing nearly $US20.6 billion in employee obligations.

In a court affidavit, Fritz Henderson, GMs chief executive, said that bankruptcy and a Treasury-sponsored sale of General Motors’ assets to a so-called “New GM” were the automaker’s only option to move forward. Failing that, he said, the company faced liquidation.

Under the plan American taxpayers will invest an additional $US30 billion in the company, which received $US19.4 billion in loans last March just to stay afloat.

The company will shed 21,000 union jobs and close between 12 and 20 factories, while 40 percent of the company’s 6,000 dealers will close

Among the plants to be shut are those in Michigan, Indiana, Ohio and Delaware, and plants in Tennessee and elsewhere in Michigan have been put on standby.

GM also plans to reopen a shuttered U.S. factory to build subcompact cars. The retooled factory will be able to build 160,000 cars a year and create 1,200 jobs, offsetting some of the 21,000 that will be lost when 14 factories are shut before the end of next year.”

A relieved Robert Lutz, GMs vice chairman, said that “for the first time in our history, the American auto industry has the ear of the administration. Their number one goal is to make us successful.”