General Motors Bankruptcy: Summary of Details
General Motor’s bankruptcy just started on Monday, June 1, but already a lot has been decided. 54 percent of GM’s unsecured bondholders have agreed to take 10 percent equity in the company plus 15 percent in warranties. The U.S. Treasury will loan GM an additional $30.1 billion. The U.S. government will own 60 percent of GM until it can be paid back. Canada and the Province of Ontario have given GM $9.5 billion and in return have received 12 percent of the “new” GM. As we all know by now, Canadian parts manufacturer Magna International has purchased Opel/Vauxhall, a division of General Motors Europe. Moreover, the U.S. Treasury Department announced that federal loans to GM will have to be used on U.S. operations only. The Magna-Opel deal looks like this:GM will own 35 percent of Opel. Russian bank Sberbank will own 35 percent and Russian auto company GAZ will be a partner and assist Opel to expand into the Russian market. Magna will give about $423.5 million in short term liquidity and in exchange will get 20 percent of Opel. Opel staff and dealers will own about 10 percent of the company. The German government will loan Opel about $6.4 billion. via Truck Trend
Fiat CEO Sergio Marchionne has said that he wants Fiat to manufacture more than 5 million vehicles a year.