Monday, June 1, 2009

And the Owner is...

GM Has Chance to 'Rise Again' Under Restructuring, Obama Says
GM's reorganization plan will rely on up to $30 billion of additional financial assistance from the Treasury Department.
FOXNews.com

President Obama said Monday that the federal government wants to fix General Motors quickly and then get out of the auto business, as the Detroit legend filed for Chapter 11 bankruptcy protection and the government prepared to pump another $30 billion into the company. "Our goal is to help GM get back on its feet ... and get out quickly," Obama said.

The president defended the White House-engineered restructuring plan and the additional government investment just hours after the troubled automaker filed for bankruptcy in New York. Though critics of the plan worried that the administration had no exit plan for its intervention, Obama said the government would act as "reluctant shareholders" and that he has "no interest" in running GM. He said the proceedings, though painful for all stakeholders, would "mark the end of an old GM and the beginning of a new GM." "What we have then is a credible plan that is full of promise," Obama said. He called the restructuring a "viable, achievable plan that will give this iconic American company a chance to rise again."

GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets. Under the plan, GM would eventually have 50 percent fewer liabilities and far fewer product lines. The $30 billion government infusion is on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans. Obama assured consumers looking to purchase GM vehicles that their warranties would be safe and government-backed. He defended the government intervention as essential, linking the health of the auto giant to the health of the U.S. economy.

And he defended the government's decision to take such a large ownership stake in the company -- estimated at 60 percent.
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