GM shares slide below a buck
This is only the latest event in what has become the financial equivalent of a slow-motion car wreck. This year, while leaders have floated the idea of a "painless" pre-structured bankruptcy, the automaker has posted devastating first quarter losses, borrowed billions from the government, tried to sell its Hummer line, and has tried to avert plant closures by scheduling long-term mandatory vacations for many of its employees. In the process, CEO Rick Wagoner fell on his $23 million sword, leaving the company where he worked for more than 30 years.
Monday, June 1, is the deadline set by President Obama for the ailing automaker to restructure. Before then, the automaker is expected to file for bankruptcy protection, a move that will give it 60-90 days to restructure and will erase most of its debt. In return for allowing a quick bankruptcy, bondholders will gain a 10 percent ownership in the new company, with an option to buy a further 15 percent. The government would end up with 72.5 percent of the reorganized company, and the United Auto Workers Union would get 17.5 percent.