Critics say General Motors has become Government Motors after filing for bankruptcy in the biggest manufacturing collapse in US history.
Under the terms of the deal, the American taxpayer will provide 30 billion dollars in order to keep the company afloat. Thousands of jobs will go as a result of the restructuring but GM’s CEO says the firm will emerge stronger. Fritz Henderson, General Motors CEO said :“Today marks a defining moment in the history of the General Motors corporation. This new GM will be built from the strongest parts of our business, including our best brands and our very finest products.” By taking a 60 percent share in the company, the US government is gambling that the automaker can become competitive by slashing its 54,000 unionised workforce by almost half. Its debt will also be cut as GM will be divided in two comprising of a new leaner GM while the old firm will include excess plants and equipment that will eventually be liquidated. Auto industry analyst, John McElroy said: “I think the worst is behind us but we have not bottomed out. We still have yet to feel the impact of all these layoffs. All these plant closings, all these dealership closings, the suppliers that are going to go down and all the other businesses that relied on them as well.” At the height of its success in the 1950s, GM employed more than half a million people. Once a symbol of US economic strength, the automaker and many of its staff are now facing an uncertain future