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GM's bankruptcy solicitors 'file for chapter 11 protection'

Published on 1 Jun 2009 under category: legal

A leading global automotive firm has revealed that its bankruptcy solicitors are filing for chapter 11 protection.

General Motors (GM) is the largest manufacturer to have sought this route in the US and the third biggest company overall.

The Obama administration will provide the firm with an additional $30 billion (£18.32 billion) in return for a majority stake. GM's plan could enable the company to emerge in between 60 and 90 days.

Christopher Richter, car industry analyst at CLSA Asia-Pacific Markets in Tokyo, states: "Now the hard part begins, which is making GM and Chrysler competitive. If they don't do that, then we'll be doing this all over again in a few years."

He predicts that the company's bankruptcy solicitors' actions will lead the group's companies to get smaller, releasing market share for rivals such as Toyota, Nissan and Hyundai.

GM's European wing was recently sold to Magma, a Canadian car parts manufacturer.