The Fate of GM - now Government controlled

As reported in a article yesterday, General Motors will now head into bankruptcy. A few more details are now known, even before the formal announcement when bankruptcy becomes reality at 8 a.m. with the petition. After GM files, President Obama will address the nation just before noon to explain the reasons why it happened and the effects that it will cause the nation.
Bankruptcy of one of the nations largest auto manufacturers is not be be taken lightly, but President Obama thinks that the bankruptcy is now the beginning of a new era for a great company.  Since GM will try to survive under Chapter 11, only the most profitable plants, dealerships, contracts, and brands will survive. Unprofitable plants, dealerships, contracts and other liabilities will be left behind.
The GM deal to take place now will be between the United States and Canadian government, along with the employees and creditors to still will be employed there.  In addition to the monies already received from the U.S. government. General Motors will receive another $30 billion, totaling almost $50 billion in the total rescue.
The U.S. Government will now own at least 60% equity in the new company after restructuring, as well as $8.8 billion in debt and preferred stock.
A trust will be created to help fund health care benefits for retirees of the UAW union will own 17.5% and will have rights to purchase almost another 3% of the company. Canada and Ontario will lend $9.5 billion and will control 12% of the equity in the new GM.
Bondholders who lent GM $27 billion will have to let go what they are owed, and would instead get a 10% share in the new company plus rights to secure another 15%.
Now the hard part. GM is expected to cut 20,000 jobs and close at least 12 plants by 2010. 40% of the 6000 dealerships will close. No longer will the automaker make the Hummer, Saab, Saturn and Pontiac.

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