General Motors to file Chapter 11 bankruptcy
- 00:01:49
- ITN
General Motors to file Chapter 11 bankruptcy
US car giant General Motors will file for bankruptcy later, US officials have said. It marks the end of an era for the 100-year-old automaker, which was once seen as a symbol of US economic might. The filing will be the third-largest in US history and the largest-ever US manufacturing bankruptcy. The decision to push GM into a fast-track bankruptcy, and provide $30 billion (£18.5bn) of additional taxpayer funds to restructure the firm is a huge gamble for the Obama presidency. The plan is for a quick sale process that will allow a much smaller GM to emerge from court protection in as little as 60 to 90 days. GM plans to close 11 US facilities and idle another three plants. It has not provided an updated target for job cuts but had been looking to cut 21,000 factory jobs from the 54,000 United Auto Workers union workers it now employs. The firm employs 92,000 workers in the US. Officials involved in the planning for GM said the White House was a "reluctant investor" but had to prevent a liquidation that analysts say would have cost tens of thousands of jobs at a time of recession. "We want a quick, clean exit as soon as conditions permit," Treasury Secretary Timothy Geithner said. Analysts said that while there were large risks to the Obama administration's approach, it had at least succeeded in pulling GM back from the brink of collapse. "I think they have a much greater chance of emerging as a healthy company now than they did just six months ago," said Aaron Bragman, an analyst at IHS Global Insight.
ITN | June 1, 2009
