Bondholders in place, the last piece for GM

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General Motor's (GM) last piece in the puzzle to file for Chapter 11 fell into place late yesterday. The deadline for bondholders to exchange $27 billion for 25 percent of the company passed. The actual structure will end up being an initial 10 percent in the company and warrants for another 15 percent.

Now that the bondholder issue is settled, the company will probably have access to $30 billion in government loans in addition to $20 billion that has already gone into the company.

Of course, if GM cannot keep its share above the 19 percent of the domestic car market that it has today, the financial engineering by the government will be academic. GM's shares could still end up being worth nothing. The Japanese, Korean, and European auto companies would like nothing better than to see GM go down so that they could pick up its customers.

It will probably take two years to tell what will happen to GM. The US car market will have improved by then and there will be evidence of whether GM's new cars are selling well. Even so, the odds of the company surviving long-term in such a competitive market are probably no better than 50/50.

Douglas A. McIntyre is and editor at 24/7 Wall St.

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