GM..."Government Motors"

(WSJ) General Motors Corp. became the second-largest industrial bankruptcy in history Monday as it filed its landmark case, with President Barack Obama predicting the humbled corporate titan will emerge from Chapter 11 "a stronger and more competitive" company within months.

GM's bankruptcy caps a frenetic few months in which the Obama administration scrambled to salvage GM as well as Chrysler LLC, the country's first- and third-largest car makers, at a cost to taxpayers of more than $62 billion.

The government-orchestrated shrinkage will cost taxpayers $30 billion, on top of $20 billion in U.S. funds already put into the company. In exchange, the U.S. will own 60% of the new GM. In all, the rescue of the car industry could cost taxpayers close to $100 billion.

GM's court-supervised restructuring began just hours after a New York bankruptcy judge approved the sale of most of Chrysler's assets to Italy's Fiat SpA. Chrysler sought Chapter 11 protection about a month ago.

President Obama defended his decision to take a majority stake in GM, saying it was unavoidable and temporary. "We are acting as reluctant shareholders," he said in a televised address.

Source (WSJ)

Scott Drake talks with Van Conway, president of CM&D, Detroit, one of the nation's top turnaround management firms.

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