America's largest automaker is on the verge of declaring bankruptcy. General Motors is expected to make the announcement Monday before U.S. financial markets open. The move will clear the way for GM to reorganize, shed assets, and clear away debt.
White House officials say GM will file for bankruptcy protection Monday in federal court.
The move will enable the beleaguered automaker to get some financial breathing room as it reorganizes into a leaner and hopefully more profitable company.
GM officials have already announced plans for a mid-day news conference in New York. And at the White House, President Barack Obama will address the American people on the fate of General Motors.
White House officials say the government will provide just over $30 billion in additional assistance to GM to support the restructuring plan. That is on top of $20 billion in emergency government loans provided earlier this year.
As a result, the American taxpayer will become a majority shareholder in one of the biggest corporations in the country. Officials say the goal is to get through the bankruptcy process as quickly and efficiently as possible, enabling the government to sell its share and leave a viable company behind.
They say their hope is that General Motors will remain under bankruptcy protection for 60 to 90 days. They predict it will take more time than the Chrysler Corporation restructuring already underway, but note GM is a larger company with more assets.
General Motors has been negotiating with bondholders and unions under a government imposed June 1 deadline for a restructuring plan. Once the biggest employer in the United States, it now will be responsible for the largest industrial bankruptcy in U.S. history.