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GM's most recent President and CEO Fritz Henderson |
“Today marks a defining moment in the reinvention of GM as a leaner,
more customer-focused and more cost-competitive company that, above
all, can quickly generate winning bottom line results." That's what GM's President and
CEO Fritz Henderson said in a statement yesterday about the company's filing for bankruptcy protection. The company's financial situation represents the fourth-largest bankruptcy filing in history.
At the moment, GM has about $82.3 billion in assets, but $172.8 billion in debts. That's a $90.5 billion shortfall. The new GM that emerges after the Chapter 11 proceedings will have governments as their majority owners. The government will hold 60.8% of the company, the governments of Canada, and the Canadian province Ontario, will hold a combined 11.7%. The health care trust for UAW retirees will have 17.5% and GM's bondholders will end up with 10%.
Part of the "reinvention" of GM mentioned earlier will be the closing of 14 of the company's currently held 47 factories. Seven of those closing are in Michigan. The exact details of which assets are kept by the company and which are sold off will be determined over the course of the bankruptcy proceedings, which will likely take a few months. Even with the government's promise to get GM through the proceedings quickly, a few months is incredibly fast for this kind of legal process.
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