GM Files for Bankruptcy; Gets Government Back-up of $30 Billion
The largest car manufacturer in the United States declares bankruptcy as the market opens morning of June 1. The federal comes to the rescue with a $30.1 billion funding to help one of the pillars of the American auto industry through the tough times.
The good assets of the company will end up and be owned by the bond holders, UAW, Canadian government, and the U.S. Treasury Department. The move will give way to the restructuring of the company. Some of the old assets like factories, brands, and dealerships will be under supervision of the court, be closed or be sold.
The U.S. government will be having a 61% stake of GM. Canada and the government of Ontario will get a 12% share in exchange of a $9.5 billion funding.
The bankruptcy is seen by the Obama administration as a way for the car company to rise again from its neck deep financial woes.