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GM Files for Bankruptcy

Posted on 01 Jun 2009

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General Motors Corp. filed for Chapter 11 today in New York federal court. The world's largest automaker for 77 years until 2008 when it was passed by Toyota Motor Corp., GM probably will spend 60 to 90 days in reorganization before emerging as a smaller, leaner firm.

In a 24-page filing in the U.S. Bankruptcy Court in the Southern District of New York, the storied automaker listed $82.29 billion in assets and $172.81 billion in debts on a consolidated basis.

GM also announced this morning that it will idle or close 14 U.S. manufacturing plants.

The plan cuts GM's 47 U.S. facilities down to 33 by 2012.

"Our manufacturing operations, which already are among the most productive in the industry, will emerge even leaner, stronger and more flexible, as part of the New GM," Gary Cowger, group vice president of GM global manufacturing and labor relations, said in a statement. "Flexible manufacturing enables us to quickly respond to consumer preferences and changing market conditions."

Closed plants include assembly plants in Pontiac, Mich., and Wilmington, Del.; stamping plants in Grand Rapids, Mich., Indianapolis and Mansfield, Ohio; and power train plants in Livonia, Flint and Willow Run, Mich., Fredericksburg and Parma, Ohio.

GM's parts division announced today that it will cease operations at three parts distribution centers in Boston; Columbus, Ohio; and Jacksonville, Fla., by the end of this year.

The Obama administration had been pushing the bankruptcy as the most viable way to restructure General Motors, just as the government has been attempting do with Chrysler. Officials said their hope is that GM would emerge from the process smaller, with fewer workers and brands, less debt, but also more viable.