WASHINGTON AND NEW YORK — General Motors Corp., long the symbol of American might and lately a stark reminder of the nation's failings, will file the largest industrial bankruptcy in U.S. history today, according to senior Obama administration officials.
The move, part of a government-led restructuring, ends months of anxiety and uncertainty about the legendary automaker, which only a decade ago was the world's largest company. GM will formally succumb to years of missteps, changing consumer tastes and a historic collapse of global auto sales, and will leave the government with a 60% stake in the company.
To keep GM afloat, the Obama administration will add $30.1 billion in taxpayer funds to the $20 billion already provided. That will make GM the second-largest recipient of bailout money, behind insurance giant American International Group.
GM will join Chrysler as the bankrupt duo of Detroit's once-formidable Big Three.
Chrysler, which filed April 30, received court approval late Sunday to transfer most of its assets to a new entity run by Italian automaker Fiat, paving the way for the company to emerge from bankruptcy as soon as this week.
The Obama administration is touting the GM filing as a painful but necessary court-supervised restructuring that will make the company profitable again and a leader in producing fuel-efficient vehicles. The only other option, the government has said, would be a liquidation that could put tens of thousands out of work throughout the industry and deal a severe blow to the economy.
It also will leave the federal government in the unusual -- and potentially uncomfortable -- position of holding a majority stake in GM, which is the top carmaker in the U.S. by volume and No. 2 globally. Administration officials said they hoped to shed the investment as soon as possible, and, meantime pledged to keep their hands off daily operations.
President Obama will announce the bankruptcy filing in a White House speech this morning, the end result of a 60-day restructuring challenge he gave to GM this spring, senior administration officials said Sunday. GM Chief Executive Fritz Henderson then will hold a news conference in New York, where the company will submit its filing in Bankruptcy Court.
Like Chrysler, GM would transfer its viable business lines to a new GM company created in bankruptcy, leaving much of its debt and unwanted assets to be liquidated in the old GM.
