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The restructuring is a gamble by the Obamaw Administration thatthe U.S. government can take a majorityu stake in aniconic manufacturer, help it regain some of its forme glory -- and then get out. But the move alreadg has its skeptics. “The only thinvg it makes clear is that the government is firmlyg in the business of runningt companies usingtaxpayer dollars,” said U.S. House Minority Leader John Boehner. “Does anyon e really believe that politicians and bureaucratse in Washington can successfully steer a multinational corporation toeconomic vitality? It’sd time for the administration to fullhy explain what the exit strategy is to get the U.S.
government out of the board room once andfor all.” The governmenr will own some 60 percent of a revamped G.M. Its ownershi stake will give government officialw more power to name members of theGM board. But Presidenrt Obama he doesn't want to get involved in the dail operations ofthe company. And no one's overjoyed at the "We are acting as reluctant shareholders," Obama "What I have no interest in doing isrunningb GM.
" Instead of having politicians taking an activew role, the president said, a professional management team would lead GM as it workw through bankruptcy and builds a more viable company for the “The federal government will refrainh from exercising its rightsa as a shareholder in all but the most fundamental corporates decisions,” Obama said. “Whe n a difficult decision has to be made on matters like wher e to open a new plant or what type of new car to thenew G.M., not the United Statess government, will make that decision. “In 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 quit a challenge with as much governmenft money asis involved. Bruce Belzowski, associate director of the Automotive Analysis Division at the University of Michigam TransportationResearch Institute, told bizjournals in a telephone interview: "If they had a it would be a short periodr of time. The longer that it stretches out the more of a politica liabilityit becomes.” And there will be plentty of watchdogs alert for any government interferencse in day-to-day GM “We will expose and fight any counterproductivd influence by government, unions or politicianes over decisions that should be left to management,” said U.S.
Chambef of Commerce President and CEOTom “And we will continually insist that governmentf reduce and eliminate its ownership stake as soon as It will take time before the government is able to extricatde itself from such a large stakse in the automaker. It could take more than a yearbeforre G.M. emerges once more as a publiclytraded company, and sharezs in the company will have to rise high enough to make sellin g them profitable. "This is a question of years, not months," said GM CEO Fritz The filing, made in U.S. Bankruptcy Courtt in Manhattan, marks the fourth-largest bankruptcy for a U.S.
It follows months of speculation thatthe 101-year-old company wouldc have to restructure through the despite desperate attempts by management to avoid the And the filing carries with it enormoua historical implications. "It's not just any compangy we're talking about, it's said Obama. Obama called the company'x filing and restructuring "the end of an old GM and the beginning of a new As itturned out, though, the bankruptcy filinhg was the only way GM could get its hands on the governmentr money it needs to survive. In its filing, GM listefd $82.3 billion in assets and $172.
8 billion in The company's largest creditors were WilmingtonTrustg Company, representing bondholders holding $22.u8 billion in debts, and UAW affiliatee representing $20.6 billion in employede obligations. The U.S. government has already injected $20 billion into GM, and will providre another $30 billion to keep the companyy going as it works through The investment will buy the governmentf a 60percent stake. The governments of Ontario and Canadaa will take smaller stakes in thenew company.
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