GM's bankruptcy official

0 Comments | Oakland Tribune, Jun 1, 2009 | by David Shepardson

CEO Henderson's sentiments echoed comments President Barack Obama made during a lunchtime news conference Monday. The president vowed GM will emerge from bankruptcy as a globally competitive company.

Speaking at the White House, where he was flanked by Cabinet secretaries and top economic advisers, he added, "What I am not doing, what I have no interest in doing, is running GM."

The president said auto executives "will call the shots and make the decisions about turning this company around." He said the government would refrain from playing a management role in all but the most critical areas.

"Our goal is to help GM get back on its feet "... and get out quickly," he said of the federal government.

The Treasury will hold an initial stake of 60 percent in GM, while the Canadian and Ontario governments will hold 12.5 percent in exchange for $9.5 billion in Canadian financing for GM. The UAW's health care trust fund will own 17.5 percent of GM. Unsecured creditors will hold 10 percent in exchange for swapping $27.2 billion in bonds -- and will get warrants totaling 15 percent of additional equity. Late Sunday, GM said more than 1,000 bondholders with 54 percent of GM's bonds had agreed to the swap -- a deal that should help speed and smooth GM's exit.

GM plans to use the same process that Chrysler is using to allow its "good" assets to emerge from bankruptcy unencumbered by unprofitable contracts and claims.

The Associated Press contributed to this story.