A person briefed on the matter says General Motors Corp. has emerged from bankruptcy protection after signing papers to transfer the bulk of its assets to a new, leaner company majority-owned by the U.S. government.
The person, who asked to remain anonymous because the action hasn’t been officially announced, said Friday the action came at 6:30 a.m. EDT Friday.
One bankruptcy expert called GM’s 40-day case the fastest ever for a company of its size.
The new GM is a smaller company that is less burdened by the staggering debt that nearly sent it to liquidation.
On Thursday, a bankruptcy court order allowing GM to sell most of its assets to a new company went into effect. The new GM, 61 percent owned by the U.S. government, will face a brutally competitive global automotive market in the middle of the worst sales slump in a quarter-century.
At a 9 a.m. press conference Friday, CEO Fritz Henderson will announce that GM will cut another 4,000 white-collar jobs, including 450 top executives. The company still employs 88,000 people in the U.S. and 235,000 worldwide.
Henderson also is expected to describe how GM will streamline its bureaucratic management structure to become profitable again. GM has said it will be able to make money even if the U.S. auto market stays at a depressed level of 10 million to 10.5 million vehicles sold.
The new GM reportedly is considering changing its logo background from blue to green to emphasize its commitment to smaller, more fuel-efficient cars, reports CBS News correspondent Anthony Mason.
The United States Treasury will be the company’s biggest stockholder; the American taxpayer will own more than 60 percent of the new GM, Mason reports.
(Source: CBS Detroit)
Join the official YWN WhatsApp status
One Response
The issue is whether it will function as a private corporation, and the government will be able to sell its shares for a nice profit in a few years – or whether it will degenerate into another Amtrak (also a private company with the government as stockholder, that loses money). If the government tells GM to make uneconomic decisions for political reasons (its already been happening), we’ll have another Amtrak on our hands.