General Motors has filed for Chapter 11 bankruptcy in which it will relaunch as a new company made up of its strongest operations within 90 days.
All operations outside the US are not affected or included in the bankruptcy filing.
GM dealers will continue to service GM vehicles and honor GM warranties and the US and Canadian governments have guaranteed manufacturers’ warranties in an effort to reassure consumers.
GM employees worldwide will become part of the “New GM”.
Fritz Henderson, GM president and CEO, said: “Today marks a defining moment in the reinvention of GM as a leaner, more customer-focused and more cost-competitive company that, above all, can quickly generate winning bottom line results.
“The economic crisis has caused enormous disruption in the auto industry, but with it has come the opportunity for us to reinvent our business. We are going to do it once and do it right. The court-supervised process we are pursuing provides us with powerful tools to accelerate and complete our reinvention, as well as strong safeguards for our customers and our business.”
GM announced separately today, GM Europe has an agreement for €1.5 billion (£1.3bn) of bridge financing from the German government and a memorandum of understanding to partner with Magna. Under the agreement, the Opel/Vauxhall assets have been pooled under Adam Opel GmbH, with the majority of the shares of Adam Opel GmbH being put into an independent trust (the balance to remain with General Motors), while final negotiations with Magna proceed. Negotiations to close the agreement should take several weeks.
The New GM
The New GM will:
- Focus on four core brands in the U.S. - Chevrolet, Cadillac, Buick and GMC - with fewer nameplates and a more competitive level of marketing support per brand
- More efficiently utilize US capacity while increasing over time the percentage of US sales manufactured domestically
- Achieve its lower structural costs in part by further reducing 2009 salaried employment in North America from its year-end total of 35,100 to approximately 27,200, and continuing to improve its balance sheet by reducing retiree benefits for salaried retirees and non-UAW hourly retirees
- Provide a higher level of customer service through a more focused US network of approximately 3,600 dealers
- Continue and increase its investment and leadership in fuel economy and advanced propulsion technologies
President Obama's Press Conference: