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→Bankruptcy for GM and Chrysler
Chrysler entered bankruptcy in April 2009, after losing $16.8 billion in 2008, and is expected to lose another $4.7 billion in 2009. It hopes to emerge quickly, with the old owners wiped out. The new owners will be Fiat of Italy, the UAW and the U.S. government.
Chrysler entered bankruptcy in April 2009, after losing $16.8 billion in 2008, and is expected to lose another $4.7 billion in 2009. It hopes to emerge quickly, with the old owners wiped out. The new owners will be Fiat of Italy, the UAW and the U.S. government.
GM enters bankruptcy in June 2009. After what is expected to be a short stay, bondholders will lose most of their investments and instead get 10% of the new stock. The new company will be 72% owned by the US government (along with the government of Canada), with the UAW health care trust (for retired workers) holding about 18% ownership. The US will provide about $50 billion to keep GM operating in the US, Canada and Latin America. The unions have agreed to major wage concessions, so that wage rates will be similar to thed transplants. It will be a much smaller company with fewer dealers and no long-term debt. Whether it will make a profit is unknown. GM is selling its European operations to a consortium from Canada and Russia, with funding from the German government.
GM enters bankruptcy in June 2009. After what is expected to be a short stay, bondholders will lose most of their investments and instead get 10% of the new stock. The new company will be 72% owned by the US government (along with the government of Canada), with the UAW health care trust (for retired workers) holding about 18% ownership. The US has already given GM $20 billion in loans; it will add another $30 billion, bringing its investment to $50 billion (in return it owns 70%). The new money will be used to keep GM operating in the US, Canada and Latin America. The unions have agreed to major wage concessions, so that wage rates will be similar to thed transplants. It will be a much smaller company with fewer dealers and no long-term debt. Whether it will make a profit is unknown. GM is selling its European operations to a consortium from Canada and Russia, with funding from the German government.
[[File:Gm-europe.jpg|thumb|290px]]
[[File:Gm-europe.jpg|thumb|290px]]