GM expected to be largest US industrial bankruptcy

Normal 0 false false false EN-US X-NONE X-NONE MicrosoftInternetExplorer4 /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; mso-style-priority:99; mso-style-qformat:yes; mso-style-parent:""; mso-padding-alt:0in 5.4pt 0in 5.4pt; mso-para-margin:0in; mso-para-margin-bottom:.0001pt; mso-pagination:widow-orphan; font-size:11.0pt; font-family:"Calibri","sans-serif"; mso-ascii-font-family:Calibri; mso-ascii-theme-font:minor-latin; mso-hansi-font-family:Calibri; mso-hansi-theme-font:minor-latin;} If General Motors, once the worldÔÇÖs largest motor manufacturer until overtaken by Toyota last year, files for bankruptcy protection as expected later today, it will earn itself another distinctionÔÇö the largest failure of an industrial company in United States history.   GM would rank as the third largest US bankruptcy of all time, following the collapse of Lehman Brothers last year and the failure of telecoms giant WorldCom in 2002.   GM had been given until today to present a viable revival plan in return for emergency government funding to avoid bankruptcy proceedings.   A majority of bondholders are believed to have now agreed to a deal giving them at least a 10 percent stake in what is likely to emerge from bankruptcy as a much smaller company.   President Barack Obama is due to give full details at a news conference today at which he is expected to announce a further $30 billion in new funding for GM.   In return for its investment the federal government is reported to be receiving a stake of 60 percent in a new, leaner company due to be re-launched within 90 days.   Restructuring is likely to see the end of GMÔÇÖs long-established subsidiaries Pontiac, Saturn and Hummer, along with a cut of around 20,000 jobs.   Meanwhile, GM's European arm looks likely to be spared bankruptcy following an 11th hour deal to sell its Vauxhall and Opel brands to Canadian car parts maker Magna International.   British unions fear that jobs may be lost at Vauxhall plants in Luton and Ellesmere Port, however, which employ 5,500 people.   UK Business Secretary Lord Mandelson said he had received assurances that Vauxhall production would remain in the UK, but what the future level of production might be has not been made clear.   The fate of GMÔÇÖs other European brand, SwedenÔÇÖs Saab, remains uncertain, with ChinaÔÇÖs Geely Holdings now said to be out of the running, although is believed to still be interested in acquiring FordÔÇÖs Swedish brand, Volvo.   Some observers believe that ItalyÔÇÖs Fiat, rejected by the German government in favor of Magna as preferred bidder for Opel, may step in to acquire Saab.   Fiat boss Sergio Marchionne is driving consolidation in the global auto industry because he expects only six global producers will survive the worldwide recession.   His strategy is to turn Fiat into the worldÔÇÖs second largest auto manufacturer, a position recently filled by GM, with a target of selling six million vehicles a year. Without Opel, he will be two million short, and the acquisition of Saab would add only around 100,000 vehicles to the mix.   Fiat, based in the northern Italian city of Turin, produced just over two million cars last year.  Better news for Marchionne is that US automaker Chrysler, already in Chapter 11 bankruptcy protection, has now secured court approval to sell most of its assets to a consortium led by Fiat. U.S. Bankruptcy Judge Arthur Gonzalez approved the sale of Chrysler assets in a ruling last night in Manhattan.  The move is backed by both the US and Canadian governments, and should enable Chrysler to exit bankruptcy protection in the near future.   Under the terms of the deal, Fiat will control 20 percent of Chrysler, while 68 percent will be owned by a union trust, with the two governments sharing the remaining 12 percent.  Auburn Hills, Michigan-based Chrysler will get $2 billion in cash to distribute to secured lenders holding $6.9 billion in loans. Fiat can walk away from the sale if it does not close by June 15, with a one month extension for antitrust approvals.   Other options for Fiat include buying GMÔÇÖs Latin America business, which would add about one million vehicles, on top of the two million from its interest in Chrysler.   Some observers believe Fiat may be tempted to bid for French-owned Peugeot, however, which would likely lead to severe job cuts and plant closures, as there is considerable overlap in product range between the Italian and French automakers.     *┬á┬á┬á┬á┬á┬á┬á┬á┬á *┬á┬á┬á┬á┬á┬á┬á┬á┬á *