Fremont Bankruptcy Attorney discusses GM’s historic Chapter 11 filing
Fremont Bankruptcy Attorney discusses GM’s historic Chapter 11 filing
Last week, General Motors (GM), once the United States largest private sector employer, filed for Chapter 11 bankruptcy. The United States government invested $30 billion to support GM through its restructuring process. The Government now owns approximately a 60% stake in the automobile company.
The goal of the Chapter 11 restructuring is to allow GM to cut its under-producing dealerships, unprofitable plants, and other dead weight liabilities. GM intends to emerge from bankruptcy leaner and with only its most profitable brands, dealerships and contracts. GM, with the assistance of the Obama Administration, has been negotiating with the United Auto Workers (UAW) union to decrease its labor costs and the high cost of its current benefits’ plan.
The GM filing comes on the heels of the Chrysler filing in April. The Chapter 11 bankruptcy filings for these two car companies will allow them to emerge stronger and more efficient to help them reclaim market-share. These bankruptcy filings should be viewed as a positive step towards the companies’ future of sustainable growth and profitability.
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