DETROIT – The government's new road map for General Motors would briefly send it into bankruptcy, erase most of its debt and eventually have it emerge leaner and stronger — and almost three-quarters owned by the taxpayers.
The outline came together Thursday after a bloc of GM's biggest bondholders agreed to a sweetened deal proposed by the Treasury Department to wipe out the automaker's unsecured debt in exchange for company stock.
But GM still must settle on a buyer for its European Opel unit and decide the fate of its Hummer and Saturn brands, while workers across the country await news expected Monday on which 14 plants the company will close, shedding 21,000 more jobs.
Efforts to sever its relationship with 2,600 dealers will probably be tied up in the bankruptcy proceedings.
A person familiar with GM's plans said it was "probable" that the company would file for bankruptcy protection Monday — the government's deadline for GM to restructure. The person did not want to be identified because the plans were still under discussion with the U.S. and Canadian governments.
Under the proposal, outlined in a regulatory filing, GM's good and bad assets would be separated under what the Obama administration hopes will be a speedy Chapter 11 reorganization that will let GM thrive when people are ready to buy cars again.
The U.S. Treasury, which already has loaned GM $19.4 billion, would get 72.5 percent of the new company's stock and provide $30 billion in additional financing to keep the new GM operating under bankruptcy protection.
Canada's government is expected to provide an additional $9 billion, a senior Obama administration official said. The official spoke on condition of anonymity because of the sensitivity of the negotiations
The outline came together Thursday after a bloc of GM's biggest bondholders agreed to a sweetened deal proposed by the Treasury Department to wipe out the automaker's unsecured debt in exchange for company stock.
But GM still must settle on a buyer for its European Opel unit and decide the fate of its Hummer and Saturn brands, while workers across the country await news expected Monday on which 14 plants the company will close, shedding 21,000 more jobs.
Efforts to sever its relationship with 2,600 dealers will probably be tied up in the bankruptcy proceedings.
A person familiar with GM's plans said it was "probable" that the company would file for bankruptcy protection Monday — the government's deadline for GM to restructure. The person did not want to be identified because the plans were still under discussion with the U.S. and Canadian governments.
Under the proposal, outlined in a regulatory filing, GM's good and bad assets would be separated under what the Obama administration hopes will be a speedy Chapter 11 reorganization that will let GM thrive when people are ready to buy cars again.
The U.S. Treasury, which already has loaned GM $19.4 billion, would get 72.5 percent of the new company's stock and provide $30 billion in additional financing to keep the new GM operating under bankruptcy protection.
Canada's government is expected to provide an additional $9 billion, a senior Obama administration official said. The official spoke on condition of anonymity because of the sensitivity of the negotiations
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