By Angelo Orlando Jr.
The US government is to take majority control of General Motors in a sweeping restructuring plan that involves more plant closures and job losses and an aggressive debt-for-equity swap.
Under the accelerated restructuring, GM will shut 13 of 47 plants by the end of next year, involving 7,000 job losses. The carmaker is also to close its 83-year-old Pontiac brand and cut its dealership network from 6,200 to 3,600 by the end of 2010.
Under the accelerated restructuring, GM will shut 13 of 47 plants by the end of next year, involving 7,000 job losses. The carmaker is also to close its 83-year-old Pontiac brand and cut its dealership network from 6,200 to 3,600 by the end of 2010.
Fritz Henderson, chief executive, said: “The objective here is not to survive. The objective is to develop an operating plan that allows us to win.”
The balance-sheet restructuring would lower GM’s debt by $44bn to an estimated $23bn, leaving the government and a healthcare trust managed by the United Auto Workers union with 89 per cent of the equity.
The balance-sheet restructuring would lower GM’s debt by $44bn to an estimated $23bn, leaving the government and a healthcare trust managed by the United Auto Workers union with 89 per cent of the equity.
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