GM Files for Chapter 11 Bankruptcy
General Motors Corp. filed for Chapter 11 bankruptcy protection Monday, setting a plan to create a 21st-century company to better compete in world markets, Bloomberg reported.
The world’s largest automaker reported $82.3 billion in assets and $172.8 billion in debt, Bloomberg said.
The U.S. government will bankroll the transformation of the 100-year-old automaker, which was hurt by lower tumbling sales and higher gas prices, and plans to convert much of its $50 billion of loans to a 60% stake in the new entity, Bloomberg reported.
GM said it plans to close nine production plants and idle three more to cut production and labor costs under the bankruptcy plan, the Associated Press reported.
Six of the plants are in Michigan. GM also will close an assembly plant in Wilmington, Del., will close in July, followed by its Pontiac, Mich., pickup truck plant in October, AP said.
Assembly plants in Spring Hill, Tenn., and Orion, Mich., will end production in the fall but could reopen if the company needs to boost production, AP reported.
Five GM powertrain plants, which make engines and transmissions, will close by December 2010—in Livonia, Flint and Ypsilanti Township, Mich.; Parma, Ohio; and Fredericksburg, Va., AP reported.
