Latest News
GM on the brink of Chapter 11
26 May 2009
GM is set to file for Chapter 11 bankruptcy protection this week, despite last-gasp efforts by the car maker to cut costs.
GM, which has already received $19.4 billion (£12.2 billion) in government funding since the beginning of the year, has been given until 1 June by the Obama administration to present itself as a viable business.
As a result, it is racing to find a buyer for Vauxhall/Opel this week, with a decision possible as early as tomorrow (Wednesday).
It is also trying to persude debtors to swap $27 billion (£17 billion) of debt in exchange for ten per cent of the shares in the company. GM has been set the target of persuading 90 per cent of its debtors to agree to this deal - a level that analysts say will be impossible.
Another hurdle the company must overcome is a $20 billion (£12.6 billion) payment it owes to the UAW workers' union trust fund. Workers will vote this week on whether to agree to changes in how this money - and other payments - will be covered.
Canadian workers have already agreed to contract changes, which have cut GM's hourly labour costs by almost 30 per cent.
Your say
Comments: 2 Join the discussion
News archive
Today's hottest stories
