GM Exits Bankruptcy

Company will reduce the number of U.S. executives by 3% and overall U.S. salaried employment by 20% by the end of this year.

A new General Motors emerged from bankruptcy on July 10 under a government-backed plan to rescue the troubled company. The automaker transferred its main assets to a new government-supported car company under a plan financed by the administration of President Barack Obama and the Canadian government. Under the plan, the U.S. government owns about 61% of the new auto company called General Motors Company. The Canadian government and a United Auto Workers union health care trust and bondholders own the rest.

The fast-track plan, similar to the one used to rescue Chrysler, creates a new auto company that will acquire the main producing assets of the automaker, while the old GM will remain under bankruptcy court supervision.

"Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers," said Fritz Henderson, who remains GM president and chief executive.

The "new GM" will be a leaner, smaller company after having shed tens of thousands of workers, eliminated or sold storied brands, shuttered scores of factories and rewritten its labor contracts to slash costs.

The new GM will keep four key brands -- Chevrolet, Cadillac, Buick and GMC -- and will have a total of just 34 U.S. nameplates by 2010.S everal brands owned by the old GM, including Saturn, Hummer, Opel and Pontiac, have been shed or are being sold.

"One thing we have learned from the last 100 days is that GM can move quickly and decisively," said Henderson. "Today, we take the intensity, decisiveness and speed of the past several months and transfer it from the triage of the bankruptcy process to the creation and operation of a new General Motors."

The chairman of the new GM is Edward Whitacre, who headed telecommunications giant AT&T.

GM is also removing layers of management -- reducing the number of U.S. executives by 3% and overall U.S. salaried employment by 20% by the end of this year.

The new firm will be unencumbered by the bulk of the massive debt load it racked up during years of bleeding balance sheets. GM entered bankruptcy protection on June 1 with liabilities of $172.8 billion and emerged with $48.4 billion in debt.