Speaking of the new owners, GM's stake will be shared between the President Obama Administration, the Canadian Government, the United Auto Worker (UAW), and GM bondholders. The U.S. Government will be financing GM with $30 billion, taking the majority of GM at 60%. The Canadian Government will be paying $10 billion, taking over 12%, while the UAW will own 17.5%. GM bondholders will take a 10% stake only in GM. Nevertheless, GM will still run its own board directors and management.
As a part of the restructure and new owners, GM will surely cut down any unprofitable costs or assets. General Motors announced that it will close or idle 14 plant factories and three Service and Parts Operations in the United States. Michigan is hit the hardest as it will see five plants being closed while another two factories will be idled. Under the new reconstructing plan, GM will reduce the total number of assembly, powertrain and stamping facilities in the U.S. from 47 in 2008 to 34 by the end of 2010 and 33 by 2012. The automaker said it will achieve full capacity utilization of its assembly operations in 2011.
To limit their costs to repay their debts, GM also announced that it has come to terms into selling Opel and British sibling Vauxhall. According to a report by Reuters, GM and Canadian auto parts group Magna International have reached a deal to invest in Opel/Vauxhall. GM and Magna also got the agreement from the German Government to sell stake in Opel. Magna and GM have signed a memorandum of understanding that will reportedly help Opel secure some 1.5 billion euros ($2.1B USD) in bridge loans, as well as shore up protections against creditors in the event of a GM bankruptcy. More interestingly, GM will still hold of 35% of Opel, which will still allow them to share technology and parts with the new Opel. Opel workers themselves will end up with 10% of the company as well.
Below, we have three videos:
1) The official President Obama speech, announcing GM Chapter 11 bankruptcy filing.
2) GM CEO Fritz Henderson comments on the bankruptcy, and announces restructuring plan.
3) GM Reinvention commercial, explaining the bankruptcy case and plan in a basic form.