America's biggest automaker filed for bankruptcy this morning after piling up tens of billions in losses. The President is pledging billions of dollars in additional financial assistance while expressing hope that GM will emerge from bankruptcy quickly, as a leaner, meaner company.
But, the process will take a heavy toll. GM announced more plant closures on Monday and some worry that bankruptcy could drive potential customers away.
GM says that it will keep four core brands, Chevy, Cadillac, Buick and GMC, while shedding four others. All warrantees will be honored, now backed by the federal government.
President Obama says he wants the federal government to help General Motors get back on its feet, but says he has no interest in running the company.
"It's a plan tailored to the realities of today's auto market, a plan that positions GM to move toward profitability, even if takes longer for our economy to recover," he said.
The U.S. government will become the majority owner at 60 percent. The company hopes to emerge from bankruptcy in a matter of months.
"This new GM will be built from the strongest parts of our business, including our best brands and our very finest products. We will have far less debt, fully-competitive labor costs and the ability to generate sustained and positive bottom-line performance," said GM President and CEO Fritz Henderson.
Getting there will involve 21,000 job cuts equaling 34 percent of GM's workforce. 2600 dealerships will close.
"From here on, we move up. This is not the end of General Motors, but the start of new and better chapter," Henderson said.
Fremont's NUMMI plant is a GM and Toyota joint venture. Its fate is unclear. Sid La France's father helped build the plant. On Monday he was waiting in Courtesy Chevrolet's service department.
"I think it has to come up to Chrysler's standards and Ford. And, I think that's what they have to do. Ford is the one that's really surviving right now," he told ABC7.
The owner of Courtesy Chevrolet could not be reached for comment Monday morning but it appeared to be business as usual there with no signs of imminent closure.
Fremont's NUMMI plant, owned jointly by GM and Toyota, released a statement before the filing saying, "Right now, we intend to continue with production as planned, which includes the Pontiac Vibe. At this point, it is unclear exactly how NUMMI might be affected by the GM bankruptcy."
The East Bay plant employs 4,000 employees.