U.S. manufacturer General Motors seeks bankruptcy protection

June 1, 2009 United States automobile manufacturing firm General Motors filed for bankruptcy and protection from its creditors at 12:00 UTC Monday, in a,. This was the largest bankruptcy filing for a U.S. manufacturing company, and with declared assets of $82.29 billion and a debt of $172.81 billion, and the fourth largest bankruptcy filing in recent U.S. history &mdash; after the bankruptcies of {{w|Lehman Brothers|| ($691.06 billion), {{w|Washington Mutual}} ($327.91 billion), and {{w|WorldCom}} ($103.91 billion).

The filing
The filing, expected to be the first of many, was for a New York GM affiliate, Chevrolet-Saturn of Harlem Incorporated. Numbered 09-50026, it named GM as a, and was filed before judge Robert Gerber.

GM is to be represented throughout the filing process by Weil Gotshal &amp; Manges, a New York law firm specializing in bankruptcy.

Restructuring of the company
The chief restructuring officer, named in the filing, is to be, a managing director at LLP in New York, who will report directly to , the  of General Motors.

Who the creditors are
In its bankruptcy petition, GM listed its primary creditors as:

The amount owed to UAW excludes "approximately $9.4 billion corresponding to the GM Internal ". USD22,760 millions are owed to bondholders.

Effects on the U.S. economy
Analysts have observed that the effect of the bankruptcy filing on the U.S. economy is not expected to be as major as it once would have been. One such voice, Mark Zandy, an economist at Moody's Economy.com, commented that "Bankruptcy now is irrelevant in terms of the economic consequence of what’s happening to GM." Such analysts believe that the economic impact of GM's problems has already been felt, with its effects on parts suppliers and employment. They also believe that GM's programme of accelerated payments, and its participation in a U.S. Treasury program to ensure prompt payments to parts manufacturers, will have cushioned the effect of the bankruptcy itself.

Speaking on Bloomberg Radio, David Cole, chairman of the Center for Automotive Research in, stated that the fragility of the parts suppliers, the loss of whom would threaten the entire automobile manufacturing industry, was of more immediate concern than the GM bankruptcy.

Other related bankruptcy filings
Also filing for chapter 11 protection today were and Saturn Distribution Corporation, subsidiary companies of General Motors.

Dow Jones listing removed
As a consequence of the bankruptcy, General Motors Corporation (GM.N) was removed from the, and was replaced by (CSCO.O), these changes scheduled by  to take effect from the opening of trading on June 8.