General Motors out of bankruptcy protection

After 40 days under a Chapter 11 Bankruptcy Protection order, a new version of General Motors (GM) will emerge today, unburdened by billions of dollars of debt, with a new structure in place and new owners.

Since June 1, when GM's long expected filing for bankruptcy protection was confirmed, a lot has happened. And whilst the reorganized corporation goes forward in to what it hopes will be a much brighter future, there is still much work to be done behind the scenes closing down the affairs of the "old" GM. As CNN reports, for another two to three years the Motors Liquidation Co (GMGMQ) will have the task of implementing a court-supervised liquidation of much of the debt and many of the assets of the former operation. Further details of the conclusion of the bankruptcy order will be outlined by GM CEO Fritz Henderson later today when he speaks at a press conference. However many of the most important elements of the deal that has been completed have already emerged. The new company will have a smaller range of products for one thing. Chevrolet, Cadillac, GMC and Buick will remain but Saturn, Saab and Hummer are being sold, along with GM's European operations. Production of the Pontiac brand is due to end in September. Nearly one third of GM's dealerships in the US will close. As will 14 of their manufacturing plants. Of the 88,000 people it currently employs in the US, 20,000 will have lost their jobs by the end of the year. But a business still remains and all 88,000 jobs may have been lost had the restructuring not been approved and liquidation of the company in its entirety followed. In return for an injection of funds eventually expected to reach nearly $60bn, the US taxpayer will own a 60.8% share of the new company. The United Auto Workers union will have a 17.5% share, held by a trust fund from which the health care costs of its retirees will be met. A further 11.7% will be held jointly by the Canadian and Ontario governments, whilst bondholders in the former GM will be compensated in part for the loss of their investment by the remaining 10% of shares. In its analysis of the new GM operation CNN notes that whilst the company still outsells Ford and Toyota in the US market, albeit with diminished numbers, it has in the last year ceded the title of the world's largest selling auto manufacturer to Toyota. It may still be some time before GM comes close to reclaiming that title, but at least it still has the chance to try. Something that looked quite uncertain until very, very recently.