With a debt of $172.81 billion and only $82.29 billion in assets, General Motors are filing for chapter 11 bankruptcy protection.
The bankruptcy protection chapter 11 allows the company to reorganize its assets without going broke. With the bankruptcy protection, the company does not go bankrupt, but will be trimmed to again make profits and sell off the parts of the company that don't make profits.
The long-term plan is to split the company to new shareholders. The U.S. government will own 60% and the Canadian government will control 12.5%. United Auto Workers will be getting a 17.5% cut and the remaining 10% will be owned by unsecuredbondholders. The current bondholders will not get any ownership in the 'new' company.'
GM will continue their line of production with Chevrolet, Cadillac, Buick and GMC, out of their line of 15 brands: Bedford, Buick, Cadillac, Chevrolet, Deawoo, GMC, HSV, Holden, Hummer, Oldsmobile, Opel, Pontiac, Saturn, Saab & Vauxhall.
The other brands are not decided yet, but will most likely be sold off seperately, if buyers can be found.
The bankruptcy of Lehman Brothers Holdings Inc. (which was the largest bankruptcy in U.S. history with $691.1 billion in assets) was likely the beginning of the GM ' downfall, as it hastened the erosion of the credit markets, making it more difficult for consumers and dealers to finance new vehicles.
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