GM Files for Bankruptcy
All the kings horses and all the bond deals couldnâ€™t keep GM from cracking. As feared, the car giant has filed for bankruptcy. Now what?
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 unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.
Plus, GM could get an additional $30 billion in federal assistance for its reorganization. Thatâ€™s on top of the $20 billion the company already received in the form of low-interest loans.
More fallout: the Pontiac, Saturn, Hummer and Saab brands will be terminated or sold. And GM will no longer be listed as part of the Dow Jones industrial average.
Oh, and the majority owner of one of Americaâ€™s most storied companies will now be the U.S. government â€“ at least for awhile.
Good times. More soon.