GM exits bankruptcy protection

Article by Christian A., on August 26, 2010

A new beginning awaits GM after it has finally exited its 39-day stay in bankruptcy protection. GM Chief Fritz Henderson gave this description in light of having marked the end of the carmaker's troubles.

The US treasury will now own 61% of GM. The focus will be on its four key brands -- GMC, Buick, Cadillac and Chevrolet.

Unwanted assets will be left behind in bankruptcy. Pontiac will be discontinued while assets that will be sold off include Saturn, Saab, Hummer and Opel/Vauxhall.

In return for the 61% stake, the US treasury is providing $60 billion of funding. The next biggest stakeholder is the United Auto Workers union with 17.5%, the Canadian government has 12%, and GM bondholders will get 10.5%.

The new GM will be a less bureaucratic company having its white collar workforce cut by 20% and its executives by 35%. The US treasury said that GM will also be a more fuel-efficient company.

The Chevrolet Volt, its flagship plug-in hybrid, is due to go on sale in the US next year. GM sales chief Mark LaNeve said, "I'm very much looking forward to the point where we're operating in the clean air and the name of the company not being associated with bankruptcy."

Topics: gm, bankruptcy

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