General Motors to retrench 23,000 more emplyees by 2011

Posted on April 28, 2009

DETROIT, Michigan: General Motors unveiled an accelerated overhaul plan Monday aimed at staving off bankruptcy by giving effective control of the ailing automaker to the US government and its main union. The new plan, which also calls for more job cuts and an end to the fabled Pontiac brand, aims to ease a crushing debt burden by converting much of the debt to stock — a move giving a combined 89 percent of GM shares to the US Treasury and United Auto Workers union. Bondholders would get 10 percent of the company’’s stock through an exchange of 27 billion dollars in outstanding bonds, leaving the existing common shareholders with just one percent of GM. Fritz Henderson, GM president and chief executive, said the new viability was part of its requirement to get additional loans from the US Treasury and may be the only way the company can avert bankruptcy. The plan is contingent on the US Treasury swapping 10 billion dollars in loans for common stock and the UAW accepting shares in exchange for a similar level of obligation to its health care funds.