Gm on its way to bankruptcy

Today, US automaker General Motors is expected to file for bankruptcy. The board of the once largest automaker in the world is still in consultation, but more than half of the creditors are already willing to compromise.

By Rudiger Paulert, WDR radio studio Washington

Now a number of creditors of the auto giant General Motors in the USA have agreed to a compromise. Their worthless bonds are to be exchanged for a ten percent stake in GM. They also receive the guarantee that their share will be increased by a further 15 percent later. A little more than half of the creditors accepted this regulation.

In total, the creditors stand for $ 27 billion in GM debt. For the observers in the USA, this clears another stone to an orderly bankruptcy procedure for GM. It has already been decided that the auto workers union will receive 17.5 percent of the shares in the new GM company, the Canadian government 12.5 percent and the American state 60 percent.

Hope for a completely new foundation for GM

The automaker’s board of directors continued its deliberations today at the company’s Detroit headquarters. Results have not yet penetrated outside. Today in the United States, a bankruptcy judge is expected for the once largest automaker in the world. GM boss Fritz Henderson had a press conference scheduled for the early evening. In a 60 to 90 day process, it is hoped, the business at GM will be placed on a completely new basis.

Around 20,000 jobs are to be cut and 14 factories are to be closed. Only the brands Cadillac, GMC, Chevrolet and Buick will remain under the umbrella of General Motors, Hummer, Saturn and Saab will be sold and Pontiac will finally die. GM only has a stake of around a third in Opel. In addition, the company will manufacture a small car in the future.

Will the streets in the USA change??

While the major plans at GM still have to be put together, the third largest automaker in the USA, Chrysler, is already further. Presumably today, too, in its orderly insolvency proceedings, Fiat will be awarded the contract as the new owner and thus effectively take over the management. In view of the far-reaching decisions for GM and Chrysler, this could set the course for the American auto industry from scratch.

Due to the financial problems of the auto companies, the Obama administration was able to significantly influence the change with tax money. If you add the additional tightening of emissions standards for cars in the USA, the streetscape in the USA will change – if the drivers in the USA play along and buy the new cars. Only then will it be seen whether the American auto industry is really on the right track with its restructuring.

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