This would be the fourth biggest bankruptcy in the country where it was reported that GM has in debt a total of US$172.81billion. According to Kent Kresa, the chairman of the company, "The General Motors board of directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many. Today marks a new beginning for General Motors. … The board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world."
The automobile industry of the USA is being allocated some US$30billion from the Treasury with an additional Canadian help of US$9.5billion. Currently, GM’s case is expected to be heard on 30 June facing the same fate with Chrysler LLC. Fritz Henderson, the Chief Executive Officer said "Our agreement with the U.S. Treasury and the governments of Canada and Ontario will create a leaner, quicker more customer and completely product-focused company, one that's more cost competitive and has a competitive balance sheet. This new GM will be built from the strongest parts of our business, including our best brands and products."
Earlier, Chrysler filed Chapter 11 and they are set to sell most of their assets to Fiat, which will be one of its quick stop measures while for GM, the US government is set to take up 60% of the company’s shares. President Obama was reportedly saying that they are working out a plan which is "viable, achievable plan that will give this iconic company a chance to rise again. Our goal is to help GM get back on its feet … and get out quickly,"
The CEO also added that "These are a substantial block of shares. This is a question of years, not months. We're confident that we will move fast. Not with a sense of urgency. We're talking about pure unadulterated speed."
Its efforts to stay afloat would include continuing to promote Chevrolet, Buick, GMC and Cadillac while 4 others will be cut. 12,000 workers will be laid off while 2,600 dealerships will be revoked in its 6,100 dealer network.
Henderson also said that "There is no other sale, or other potential purchasers, present or on the horizon. The only other alternative is the liquidation of the debtors' assets that would substantially diminish the value of GM's business and assets, (and) throw hundreds of thousands of persons out of work and cause the termination of health benefits and jeopardize retirement benefits for current and former employees and their families."