General Motors Files for Bankruptcy Protection

By U.S. News & World Report

With time running out on its June 1st restructuring deadline, GM expected to file for bankruptcy today. ABC World News reported last night it is a "foregone conclusion" that GM "will file for bankruptcy" Monday, "all in an effort to survive." One "estimate of best case scenarios predicts that GM and Chrysler's bankruptcies together will cost individuals more than $13 billion. Local governments, more than $5 billion."

NBC Nightly News reported "all the pieces are in place for General Motors to go bankrupt" after "54% of those holding $27 billion in GM bonds agreed to swap that debt for a stake in the new GM, clearing the path for a potentially smoother, quicker GM bankruptcy." The Detroit Free Press also reports that "a deal with bondholders not to oppose GM's bankruptcy plan was seen as an important step to helping speed GM's bankruptcy process." According to USA Today, "the U.S. government will invest an additional $30.1 billion in General Motors (GM) to finance its bankruptcy reorganization to be filed Monday, President Obama's auto task force said in a statement."

In a front-page story, the Washington Post says the restructuring plans call for "about 60 percent of the new GM" to "be owned by the United States, about 12 percent by the governments of Canada and Ontario, a union health trust would own 17.5 percent, and the company's current bondholders would get 10 percent." Although GM "now joins Chrysler as the bankrupt duo of Detroit's once-formidable Big Three," the Los Angeles Times points out that "the Obama administration is touting the bankruptcy filing as the beginning of a new era for GM, a painful but necessary court-supervised restructuring that will make the company profitable again and a leader in producing fuel-efficient vehicles."

The New York Times profiles 31-year-old Brian Deese, "a not-quite graduate of Yale Law School who had never set foot in an automotive assembly plant until he took on his nearly unseen role in remaking the American automotive industry." Yet, "according to those who joined him in the middle of his crash course about the automakers' downward spiral, he has emerged as one of the most influential voices in what may become President Obama's biggest experiment yet in federal economic intervention."

Meanwhile, the New York Times notes on the front page of its business Day section, "With General Motors about to follow Chrysler into bankruptcy, the nation's ability to bounce back from the steep recession is being hobbled."

Chrysler Could Exit Bankruptcy As Early As Monday   The Wall Street Journal reports on its website, "Chrysler LLC could exit bankruptcy reorganization as soon as Monday, after barely a month in Chapter 11 protection," as "Judge Arthur Gonzalez of the U.S. Bankruptcy Court in Manahattan is expected to approve the sale of most of Chrysler's assets on Monday to its alliance partner, Fiat SpA."