GM To Cut 21,000 Jobs
By Justin Gardner | Related entries in Cars, Jobs
And Pontiac will vanish.
DETROIT – General Motors Corp. could be majority owned by the federal government under a massive restructuring plan laid out Monday that will cut 21,000 U.S. factory jobs by next year and phase out the storied Pontiac brand.The plan, which includes an offer to swap roughly $27 billion in bond debt for GM stock, would leave current shareholders holding just 1 percent of the century-old company, which is fighting for its life in the worst auto sales climate in 27 years.
GM is living on $15.4 billion in government loans and said Monday in a filing with the U.S. Securities and Exchange Commission that it envisions receiving an additional $11.6 billion. But if GM’s restructuring plan can’t satisfy the government by June 1, the struggling company could go into bankruptcy protection.
So how do they plan to restructure?
Pretty simple…the government will now own GM:
GM said that it will ask the government to take more than 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1. The swap would cancel about $10 billion in government debt.In addition, GM is offering stock to the United Auto Workers for at least 50 percent of the $20 billion the company must pay into a union run trust that will take over retiree health care expenses starting next year.
If both are successful, the government and UAW health care trust would own 89 percent of GM stock, with the government holding more than a 50 percent stake, CEO Fritz Henderson said in a news conference at GM’s Detroit headquarters.
I guess the name GM is still appropriate since it’ll essentially be short for Government Motors after this deal.
Have at it…
This entry was posted on Monday, April 27th, 2009 and is filed under Cars, Jobs. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
April 27th, 2009 at 3:13 pm
Yay! Every country needs its Yugo!
This whale is going to beach itself again.
April 27th, 2009 at 4:54 pm
I’ve owned nothing but GM cars all of my life.
My future purchases will be Ford automobiles. They are apparently running their company right.
April 27th, 2009 at 5:03 pm
Rich – I second that. GM is dead to me. It was hardly alive to me to begin with, but I will never, ever buy from Government Motors. I would sooner WALK. It is a great day for Ford.
April 27th, 2009 at 7:55 pm
just let it freakin die. They ran the company into the ground, and all their excuses are just that – excuses.
April 27th, 2009 at 10:01 pm
They have been making Garbage for the past 40-50 years anyway. Let them die.