GM officially bankrupt

We all knew it was going to happen, so it’s hardly a shock that it has. Bankruptcy for GM has been inevitable for months, even though it took a long time for both the company itself, and the US Government, to reach the conclusion the rest of the world had. Poor quality product and head-in-the-sand management is something you may be able to get away with in the good times, but when the economy starts to tumble it’s the weak companies that bite the dust.

The US Government is to provide £30 billion to fund the transition, with GM being split in to ‘Old GM’ and ‘New GM’. In exchange for the money the US Government will take a 60% stake in ‘New GM’ with all the toxic assets and liabilities being disposed of through ‘Old GM’.

The restructuring will allow GM to survive on a third less sales than before (10 million instead of 15 million). No real word yet on what brands will survive and what products are going to make a difference. But that will come.

GM’s European division is ringfenced from these proceedings and as we reported will now be run by Canadian Parts Company Magna. Saab, which is looking to Koenigsegg for salvation is also outside these proceedings. Let’s hope things can now move on and GM can look to create a business that supplies the cars its customer want.

They now have a chance.