General Motors officially bankrupt

General Motors, once the world’s largest automaker, has officially filed for bankruptcy. As analysts have known for months finally got confirmed, the largest car manufacturer in the world filed for “Chapter 11 bankruptcy protection” on June 1, 2009 in a New York court, declaring $82 billion in assets and $172 billion in debts.

The century-old company will gain extensive assistance from the U.S. government. The Obama administration will loan a further $30 billion in financing to GM, after the automaker has already received over $19 billion. Bankruptcy proceedings will see the company’s assets split into “Good GM” and “Bad GM,” the latter of which will be liquidated.

The U.S government gets a 60% share of the company and will supposedly act sort of like a silent partner, but will still be involved in large decisions, such as selecting the company’s board of directors and major corporate transactions. While this may not equate to day-to-day management decisions, the government will surely have the ability to influence company plans through appointments and such decision-making processes.

Incidentally, some of GM’s non-manufacturing foreign operations are claiming that they are unaffected. For example, General Motors Middle East, headquartered in Dubai, says it operates under General Motors Overseas Distribution Corporation (GMODC), which is apparently self-funded and profitable enterprise.

GM concluded that all warranties would be honored for existing customers.

Post a comment: