GM Files for Bankruptcy

[KenP]

As expected, GM filed for bankruptcy this morning. Here's some bits and pieces:

General Motors filed for Chapter 11 bankruptcy protection Monday as part of a plan under which the government will pump another $30 billion into the company with the aim of re-creating the troubled automaker.

Now get this crap:

Senior administration officials, who declined to speak for attribution, said the U.S. government will be a "passive" investor but will oversee operations at the new GM because "the taxpayer will want us to."

They haven't been passive in firing the CEO.

The government will receive $8.8 billion in debt and preferred stock and 60 percent of the company's equity. Treasury will appoint all new board of directors members not appointed by the VEBA and the Canadian government.

That's not very "passive".

And if you own stock, say goodbye:

The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.

Goodbye Hummer:

The downsized GM brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed. GM said it was finalizing a deal to sell Hummer, and plans for Saturn are expected to be announced within weeks.

The government will only vote on core governance issues, including the selection of a company's board of directors and major corporate events or transactions.

That could include sporting events, such as NASCAR.

Well, there's nothing we can do about it, so we'll have to sit back and see if the Obama administration keeps it word. I doubt they will.