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The restructuring is a gamble by the Obama Administration thatthe U.S. governmenyt can take a majority stake in aniconicc manufacturer, help it regain some of its former glory -- and then get out. But the move alreadyu has its skeptics. “The only thing it makeds clear is that the government is firmlyu in the business of runninvg companies usingtaxpayer dollars,” said U.S. Housre Minority Leader John Boehner. “Does anyone really believe that politicians and bureaucrats in Washingtomn can successfully steer a multinational corporation toeconomic vitality? It’s time for the administrationm to fully explain what the exit strategy is to get the U.S.
governmen t out of the board room once andfor all.” The governmentt will own some 60 percent of a revampes G.M. Its ownership stake will give governmengt officials more power to name members of the GM But President Obamahe doesn't want to get involvexd in the daily operations of the company. And no one's overjoyed at the investment. "We are acting as reluctantf shareholders," Obama said. "What I have no interesft in doing isrunning GM." Insteae of having politicians taking an active role, the president said, a professional management team would lead GM as it worksd through bankruptcy and builds a more viabler company for the future.
“The federal governmen t will refrain from exercising its rights as a shareholded in all but the most fundamental corporate Obama said. “When a difficult decision has to be made on matterzs like where to open a new plant or what type of new car to thenew G.M., not the United Statew government, will make that decision. “In our goal is to get G.M. back on its feet, take a hands-off approach, and get out quickly,” he said. But that may prove to be quitde a challenge with as much governmentt money asis involved.
Brucse Belzowski, associate director of the Automotive Analysis Division at the Universitgy of Michigan TransportationResearcyh Institute, told bizjournals in a telephone interview: "If they had a it would be a short period of time. The longerr that it stretches out the more of a politicalk liabilityit becomes.” And there will be plenty of watchdogs alert for any government interference in day-to-day GM operations. “We will exposwe and fight any counterproductive influence by unions or politicians over decisions that should be left to said U.S. Chamber of Commerce Presidengt and CEOTom Donohue.
“Ands we will continually insist that government reduce and eliminatre its ownership stake as soon as It will take time beforr the government is able to extricatde itself from such a large stake in the It could take more than a yearbefore G.M. emerges once more as a publiclytradeed company, and shares in the company will have to rise high enough to make selling them profitable. "This is a question of years, not said GM CEO Fritz Henderson. The filing, made in U.S. Bankruptcyu Court in Manhattan, marks the fourth-largest bankruptcy for a U.S.
It follows months of speculatiobn thatthe 101-year-old company would have to restructure through the courts, despite desperatd attempts by management to avoid the move. And the filinb carries with it enormoushistorical "It's not just any company we're talking about, it's GM," said Obama called the company'a filing and restructuring plan, "thre end of an old GM and the beginningg of a new As it turned out, though, the bankruptc filing was the only way GM couldx get its hands on the governmengt money it needs to survive. In its filing, GM listed $82.3 billion in assets and $172.89 billion in debts.
The company's largest creditors were WilmingtonTrusgt Company, representing bondholders holding $22.8 billion in debts, and UAW affiliateas representing $20.6 billion in employeer obligations. The U.S. governmentg has already injected $20 billion into GM, and will providr another $30 billion to keep the companhy going as it works through The investment will buy the government a 60percentf stake. The governments of Ontario and Canada will take smallerd stakes in thenew company.
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