GM files for Chapter 11 bankruptcy protectionPosted: Updated:
(AP) - General Motors filed for Chapter 11 bankruptcyprotection Monday as part of the Obama administration's plan toshrink the automaker to a sustainable size and give a majorityownership stake to the federal government. GM's bankruptcy filing is the fourth-largest in U.S. history andthe largest for an industrial company. The company said it has$172.81 billion in debt and $82.29 billion in assets. The fallen icon of American industrial might will rely on $30billion of additional financial assistance from the TreasuryDepartment as it reorganizes. That's on top of about $20 billion intaxpayer money GM already has received in the form of low-interestloans. GM will follow a similar course taken by Chrysler LLC, whichfiled for Chapter 11 protection in April and hopes to emerge fromits government-sponsored bankruptcy this week. The plan is for the federal government to take a 60 percentownership stake in the new GM. The Canadian government would take a12.5 percent stake, with the United Auto Workers getting a 17.5percent stake and unsecured bondholders receiving 10 percent.Existing GM shareholders are expected to be wiped out. President Barack Obama is scheduled to address the nation aboutGM's future at midday from Washington, and GM CEO Fritz Hendersonis to follow him with a news conference in New York. Beyond the bankruptcy announcement Monday, GM is expected toreveal 14 plants it intends to close. One of those plants, however,will be retooled to build a small car. GM's filing comes 32 days after a Chapter 11 filing by Chrysler,which also was hobbled by plunging sales of cars and trucks as theworst recession since the Great Depression intensified.