General Motors Bankruptcy: "...with regret that this path proved necessary..."

Scott Benjamin

(© GM Corp.)

Well, it's done. General Motors has filed for Chapter 11 bankruptcy. If you're interested (and this will only take about 30 seconds to read), here's the simple, yet well-crafted statement from the GM Board of Directors.

There's a great deal of hope in that short press release -- a lot of terms like "new beginning," "stronger, healthier," "nimbler" and even "determination." But what does this latest development actually mean for the troubled Detroit automaker? Well, for starters, it means about $30 billion of additional federal assistance money. Unfortunately, it will also mean a lot of plant shutdowns, heavy job loses and lots of government influence moving forward...or as the White House fact sheet calls it: shared sacrifice.

On the positive side (or should I say on the other side of the Atlantic?), the latest news from GM Europe is that Magna International Inc. is going to be taking the majority of the stake in GM's European Opel/Vauxhall divisions. This statement makes it clear:

"GM Europe today announced it continues normal operations and it is not included in the court-supervised process of General Motors Corp (NYSE: GM), its U.S. parent, with the commitment for bridge financing from the German government and an MOU [Memorandum Of Understanding] to partner with Magna International Inc."

In other news, it looks like Chinese automaker Geely, is no longer interested in buying GM's Saab division. But is Geely still planning to make another grab for Ford's Volvo group? No one's talking right now.

And by the way, the Chrysler sale to Fiat has been approved, too...most of it, anyway. You can read all about it in Bree Fowler's article in The Washington Post.

So, it appears that it's going to be an eventful automotive news week. And now, to answer your next question: No, I'm not going to be posting an automaker who-owns-who (or what) flow chart anytime soon. I'm probably just as confused as you are. But maybe when things settle down a little bit we can sort it all out together?

More related stuff: General Motors Corporation How Bankruptcy Works How Ford Works How Chrysler Works