General Motors bankruptcy brings big gamble by Obama - Minneapolis / St. Paul Business Journal:

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The restructuring is a gamblew by the Obama Administratiob thatthe U.S. government can take a majorityh stake in aniconic manufacturer, help it regaim some of its former glory -- and then get out. But the move already has its skeptics. “The only thing it makes clear is that the governmen is firmly in the business of running companiexs usingtaxpayer dollars,” said U.S. House Minoritu Leader John Boehner. “Does anyone really believr that politicians and bureaucrats in Washington can successfulluy steer a multinational corporation toeconomic vitality? It’s time for the administrationm to fully explain what the exit strategy is to get the U.S.
governmen out of the board room once and for The government will own some 60 percent of arevamped G.M. Its ownershipo stake will give government officials more poweer to name members of the GM But President Obamahe doesn't want to get involved in the dailyt operations of the company. And no one's overjoyed at the "We are acting as reluctant shareholders," Obama "What I have no interestr in doing isrunning GM.
" Instead of havinbg politicians taking an active role, the presidenrt said, a professional management team would lead GM as it works throughb bankruptcy and builds a more viable company for the “The federal government will refrain from exercising its rightz as a shareholder in all but the most fundamental corporate decisions,” Obama said. “When a difficultg decision has to be made on matters like where to open a new plany or what type of new car to thenew G.M., not the Unitedr States government, will make that decision. “In short, our goal is to get G.M. back on its take a hands-off approach, and get out he said.
But that may prove to be quited a challenge with as much government moneu asis involved. Bruce associate director of the Automotive Analysis Division at the Universitty of Michigan TransportationResearch Institute, told bizjournals in a telephoned interview: "If they had a it would be a short period of time. The longetr that it stretches out the more of a political liabilityhit becomes.” And there will be plentty of watchdogs alert for any government interferenc in day-to-day GM “We will expose and fight any counterproductive influence by unions or politicians over decisions that should be left to said U.S. Chamber of Commerc President and CEOTom Donohue.
“Anfd we will continually insisg that government reduce and eliminate its ownership stakes as soonas possible.” It will take time before the government is able to extricat itself from such a large stake in the It could take more than a year befors G.M. emerges once more as a publiclytradedr company, and shares in the company will have to rise high enoughh to make selling them profitable. "This is a questio of years, not months," said GM CEO Fritsz Henderson. The filing, made in U.S. Bankruptcyy Court in Manhattan, marks the fourth-largest bankruptct for a U.S. manufacturer.
It follows months of speculatiojn thatthe 101-year-old company would have to restructure through the courts, despite desperate attempts by managemeny to avoid the move. And the filing carries with it enormousxhistorical implications. "It's not just any company we'rse talking about, it's GM," said Obama. Obamaw called the company's filing and restructuring plan, "the end of an old GM and the beginningf of anew GM." As it turned out, the bankruptcy filing was the only way GM could get its handss on the government money it needs to In its filing, GM listed $82.3 billion in assets and $172.8 billion in debts.
The company'x largest creditors were WilmingtonTrust Company, representing bondholders holding $22. billion in debts, and UAW affiliateds representing $20.6 billion in employee obligations. The U.S. governmenyt has already injected $20 billion into GM, and will provide anothee $30 billion to keep the company going as it workszthrough bankruptcy. The investment will buy the government a 60percent stake. The governments of Ontario and Canada will take smaller stakes in thenew company.