NEW YORK AND LOS ANGELES — General Motors Corp.'s historic bankruptcy promises to turn more than $50 billion from taxpayers into a fresh start, allowing the struggling giant to again become an engine for the U.S. economy.
Freed from its most crushing financial obligations, GM hopes to rediscover profit in the century-old profession of building and selling autos.
But with the government poised to own 60% of GM, there was increased criticism Monday that President Obama had committed far too many taxpayer dollars, most of which may never get repaid, to a company lacking an answer to its most profound problem: how to get more car buyers to choose its cars and trucks.
GM executives plan to twist the firm's substantial woes to its advantage, using the government-backed restructuring to rework its balance sheet: shedding dealers and vehicle brands, eliminating employees and plants, selling overseas units and learning to live with a smaller market share.
The big question is whether that formula adds up to a return to profitability -- or simply delays the company's eventual collapse into insolvency.
GM will lack the heft to vie for the crown of the world's largest auto company. It may not even remain the biggest automaker headquartered in the U.S., where it once accounted for more than half of all cars sold. Rival Ford Motor Co. may slide into that spot while GM struggles to regain its financial footing.
"GM will be trimmed down in almost every respect," said Michael Robinet, a vice president of consulting firm CSM Worldwide. "And they're not using scissors. They're using a hatchet."
Bankruptcy will leave lost jobs, diminished benefits, depleted investor portfolios and sacrificed dealerships in its wake. And because GM is effectively playing with the house's money, the automaker is bringing the entire nation along for the ride.
It also will test the president's political mettle. Obama came under attack from Republicans, who dubbed the company "Government Motors," and even some Democrats for taking such a big stake in a company whose global market share is sliding.
"We are acting as reluctant shareholders because that is the only way to help GM succeed," Obama said in a national address.
Despite marking the end of an era in the story of American industry and a low point for the storied automaker, GM executives characterized the bankruptcy filing as a once-in-a-lifetime chance to start anew.
