Biggest failure in US history of an industrial company
Car giant General Motors are expected to file for bankruptcy protection today, the firm was given until June 1st to present a viable revival plan in return for emergency government funding.
It has been reported a majority of bondholders have now agreed to a deal giving them at least 10% stake in what will be a much smaller company. The federal government is reported to be receiving a stake of 60% in a new company to be relaunched within 90 days.
The relaunch is likely to drastically change General Motors with some 20,000 workers likely to lose their jobs. Saab the remaining General Motors brand in Europe are also under threat, although General Motors Europe is likely to be spared bankruptcy following a proposed deal by Canadian car parts maker Magna International to buy General Motors Europe’s Vauxhall and Opel Brands.
UK Business Secretary Lord Mandelson said he had received further assurance from GM Europe that Vauxhall production would remain in the UK but Vauxhall plants in Luton and Ellesmere Port fear that jobs may be lost where 5500 people are employed.