By: Dan Strumpf and Kimberly S. Johnson
AP Auto Writers
General Motors filed for Chapter 11 bankruptcy protection Monday as part of the Obama administration’s plan to shrink the automaker to a sustainable size and give a majority ownership stake to the federal government.
Under the new restructuring plan, the U.S. will own 60 percent, the Canadian government would take 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.
It is expected that the U.S. will invest another $30 billion and $9.5 billion from Canada. In total, the U.S. will have put up $50 billion, having previously invested $20 billion in taxpayer money in the form of low-interest loans.
Administration officials, speaking on condition of anonymity in advance of Obama’s public remarks, said they expect the bankruptcy court process to last 60 to 90 days. If successful, GM will emerge as a leaner company with a smaller work force, fewer plants and a trimmed dealership network.
General Motors files for bankruptcy protection
