General Motors, Bailouts | featured news

The deal between General Motors and the Obama administration solves a problem that could have troubled the company’s plan for quick restructuring.

The government will likely hold a large share of G.M. after it emerges from bankruptcy, and the union will hold 17.5 percent through its health fund.

The former financing arm of General Motors will receive $7.5 billion, which would bring its total federal assistance to more than $12 billion.

General Motors Corp. said it will cut 21,000 U.S. factory jobs by next year, phase out its storied Pontiac brand and ask the government to take more than half its stock in exchange for half of GM's government debt as part of a major restructuring that would leave current shareholders holding just 1 percent of the company.

General Motors (GM) has received another $2bn (£1.4bn) in loans from the US Treasury, it has been announced.

General Motors Corp. will not make a $1 billion debt payment due June 1, its CFO, Ray Young, told reporters on Wednesday. Instead, it is hoping to complete a debt-for-equity exchange or be forced to resort to bankruptcy.

GM's stock plummeted on the news.

General Motors Corp. could get as much as $5 billion more in federal loans, while Chrysler LLC could get $500 million as they race against government-imposed deadlines to restructure, according to a government report filed Tuesday.

Bailed-out banks take notice after Obama adopts hard line with Detroit, forces GM CEO to resign.

President Barack Obama will announce the next steps to help General Motors Corp and Chrysler LLC on Monday, the White House said, amid signs of progress for GM in talks aimed at slashing its debt and cutting costs in response to slack demand.

US carmaker General Motors says it will not need the $2bn it had previously requested for March from the government.