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General Motors filed for bankruptcy protection on Monday, seeking a quick restructuring similar to that of Chrysler to allow the former American industrial icon to emerge leaner and wipe out massive debts.
The filing in the same New York court that approved a speedy restructuring for Chrysler aims to allow the former world number one carmaker to re-emerge as a new, leaner company within 60 to 90 days.
The new firm 'will be built from only GM's best brands and operations, and it will be supported by a stronger balance sheet due to a significantly lower debt burden and operating cost structure than before', the Detroit giant said in a statement.
GM listed asset of 82.3 billion dollars and debts of 172.8 billion in the case, assigned to Judge Robert Gerber, in one of the biggest bankruptcy cases in US history.
The US industrial icon enters the process aiming for a so-called pre-packaged bankruptcy with billions in government financing and agreements in place to cut labour costs, swap much of its debt for equity and reduce its liabilities by 50 per cent.
It will close 11 plants and idle three others as it slashes its operating costs in order to lower its break-even point by 40 per cent in terms of overall US industry sales.
Employees will continue to be paid and GM will immediately seek permission to continue to pay suppliers and honour customer warranties.
GM will also offer about 40 per cent of its dealers 18 months to wind down their operations and will immediately seek permission to honour incentives offered to its remaining dealers, under a plan to shrink the number of GM sales outlets.
