General Motors Corp. filed for bankruptcy protection yesterday as the iconic U.S. automaker rid itself of decades-old financial burdens and shed thousands more jobs in a streamlining aided by massive help from the Obama administration and $10.5 billion from Canada.
GM’s bankruptcy filing is the largest ever for a U.S. industrial enterprise and puts the U.S., Canadian and Ontario governments firmly in control of the company, although U.S. President Barack Obama tried to ease concerns that government bureaucrats will run the day-to-day affairs of the world’s second-biggest carmaker.
Obama said the U.S. government will own 60 per cent of the new GM, while the two Canadian governments will hold about 12 per cent in return for their $10.5-billion contribution.
In Toronto, Prime Minister Stephen Harper said Canada had no choice but to bail out the battered automaker, which has been producing cars in this country for just more than a century. Without federal and Ontario aid, the pressure to shift thousands of GM jobs to the United States from Canada would have been enormous.
GM will rely on $30 billion of additional financial assistance from the U.S. Treasury Department as it reorganizes. That’s on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans.