General Motors bankruptcy brings big gamble by Obama - bizjournals:

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The restructuring is a gamble by the Obam Administration thatthe U.S. government can take a majority stakew in aniconic manufacturer, help it regain some of its formed glory -- and then get out. But the move alread y has its skeptics. “The only thinb it makes clear is that the governmenty is firmly in the businesx of running companies usingtaxpayer dollars,” said U.S. Housd Minority Leader John Boehner. “Does anyone really believe that politiciansx and bureaucrats in Washington can successfully steer a multinational corporatioj toeconomic vitality? It’s time for the administration to fullh explain what the exit strategy is to get the U.S.
governmenft out of the board room once and for The government will own some 60 percent of arevampee G.M. Its ownership stake will give governmenf officials more power to name members of theGM board. But Presiden Obama he doesn't want to get involvee in the daily operations of the Andno one's overjoyed at the investment. "Wed are acting as reluctant shareholders," Obama said. "Whatt I have no interest in doing is running Instead of having politicians taking anactivr role, the president said, a professional managementr team would lead GM as it worksw through bankruptcy and builds a more viablew company for the future.
“The federal government will refraijn from exercising its rights as a shareholder in all but the most fundamentaocorporate decisions,” Obama said. “When a difficulft decision has to be made on matters like wherew to open a new plant or what type of new car to thenew G.M., not the United Statesw government, will make that decision. “Inn short, our goal is to get G.M. back on its take a hands-off approach, and get out quickly,” he said. But that may provde to be quite a challenged with as much government mone y asis involved.
Bruce Belzowski, associate directorf of the Automotive Analysis Divisionn at the University of Michigan TransportationResearcy Institute, told bizjournals in a telephone "If they had a choice, it woulxd be a short period of time. The longerr that it stretches out the more of a political liability it And there will be plenty of watchdogs alertf for any government interferencdin day-to-day GM operations. “We will expose and fight any counterproductivd influenceby government, unions or politicianzs over decisions that should be left to management,” said U.S. Chamberf of Commerce President and CEOTom Donohue.
“And we will continuall y insist that government reducw and eliminate its ownershi stake as soonas possible.” It will take time beforre the government is able to extricate itself from such a large stake in the automaker. It coule take more than a yearbefore G.M. emerges once more as a publiclyutraded company, and sharews in the company will have to rise high enougn to make selling them profitable. "This is a questiobn of years, not months," said GM CEO Fritzz Henderson. The filing, made in U.S. Bankruptcy Courtg in Manhattan, marks the fourth-largest bankruptcy for a U.S.
It follows months of speculation thatthe 101-year-old company wouldf have to restructure througg the courts, despite desperate attempts by management to avoid the And the filing carries with it enormoud historical implications. "It's not just any company we'rw talking about, it's GM," said Obama called the company's filing and restructuring plan, "thew end of an old GM and the beginning of a new As itturned out, though, the bankruptcy filin was the only way GM couldx get its hands on the governmentt money it needs to In its filing, GM listed $82.3 billion in assetsw and $172.8 billion in debts.
The company's largest creditorzs were WilmingtonTrust Company, representing bondholders holding $22.8 billion in debts, and UAW affiliates representinvg $20.6 billion in employee obligations. The U.S. government has already injected $20 billion into GM, and will provide anothef $30 billion to keep the compant going as it worksthrough bankruptcy. The investment will buy the governmenyt a 60percent stake. The governments of Ontario and Canada will take smalled stakes in thenew company.