General Motors Bankruptcy Filing

General Motors is a United States automaker based in Detroit, Michigan. On June 1st 2009 General Motors filed for Chapter 11 bankruptcy protection. General Motors once sat at the top as one of the world’s largest automakers. This is the fourth-largest bankruptcy filing in the United States history. General Motors has $172.81 billion in debt and $82.29 billion in assets. General Motors has already received $20 billion of low interests loans. It will rely on $30 billion more of financial assistance from the Treasury Department. The ownership stake in the new General Motors will be divided by four.

1. The federal government will hold 60% ownership.

2. The Canadian government will hold 12.5% ownership.

3. The United Auto Workers will hold 17.5% ownership.

4. Unsecured bondholders will hold 10% ownership.

The remaining shareholders 0% ownership.

What brought all this about? Record oil prices and high gas prices, recession, health-care and retiree expenses. Also the heavy competition in the automobile industry and sales. Many Americans prefer smaller economy sized vehicles that get more gas mileage compared to the SUV. The restructuring General Motors will permanently close nine plants to trim production and cut labor costs. As part of the recession the job losses could make the economy plunge even deeper.

General Motors bankruptcy filing has caused great confusion and many unanswered questions to millions of consumers. Those who already own a General Motors vehicle or those who were planning to purchase one bring about questions dealing with warranties, loans, etc.

What about paying GMAC? Continue to make your payments on your vehicle, nothing has changed.

What about my vehicle warranty? Vehicle warranties will still be honored. They are backed by the federal government.

Can I still purchase a Gm vehicle? Yes, you may even get a better deal in a few months after the bankruptcy filing.

Can I still have my vehicle serviced? Yes, you may have to drive to another location.

General Motors was a global sales leader for 77 consecutive years from 1931- 2007. General Motors employed 244,500 people worldwide. General Motors manufactured in 34 countries. General Motors sold and serviced in 140 countries. General Motors has a plan to re-emerge to a smaller organization. Yes, there will be a new beginning for General Motors, a smaller, leaner inventory and a more focused product consumers will purchase like a General Motors economy efficient vehicle compared to the larger sized SUV.

General Motors being the fourth largest in United States history filing bankruptcy followed Washington Mutual, Lehman Brothers Holdings Inc., and World Com Inc. General Motors was the largest industial organization to file in the United States. Some vehicles you may recognized as being manufactured and sold by GM are Buick, Cadillac, GMC, Pontiac, GM Daewoo, Chevrolet, Saab, Saturn, Opel, and Holden.