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The Swamp
Chicago Tribune

The 'new GM' will start out with $30 billion in federal support.

Posted May 31, 2009 10:00 PM
The Swamp

by Mark Silva

As the nation's largest automaker heads into bankruptcy court in the morning, the Obama administration this evening spelled out the agreements that it has made for the reorganizaiton of the ailing car-and-truck-maker: Including $30 billion in federal aid, but no more, and a 60 percent government stake in the equity of "the new GM.''

At the end of March, the White House said this evening, President Barack Obama presented "a framework for General Motors to achieve viability that required the company to rework its business plan, accelerate its operational restructuring and make far greater reductions in its outstanding liabilities.''

The government also ousted the CEO.

"After two months of significant management engagement, General Motors has developed such a plan and has already begun to make progress toward its achievement,'' the White House press secretary said in a statement issued this evening, on the eve of GM's expected entry into U.S. Bankruptcy Court.

. "The company has also secured commitments of meaningful sacrifice from all of its major stakeholder groups, sacrifices sufficient for this plan to proceed forward,'' the White House said. "As a result, the president has deemed GM's plan viable and will be making available about $30 billion of additional federal assistance to support GM's restructuring plan. To effectuate their plan, General Motors will use Section 363 of the bankruptcy code to clear away the remaining impediments to its successful re-launch.

"For the better part of a century, the General Motors Corp.has been one of the most recognizable and largest businesses in the world,'' the press secretary's statement said. "Today will rank as another historic day for the company -- the end of an old General Motors, and the beginning of a new one.''

See the terms of the deal, from the White House:

Continue reading "General Motors: Obama's new deal" »

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