By Mike Lewis, Times-Mail
mikel@tmnews.com
The Bedford GM Powertrain plant escaped the worst news today as General Motors Corp. filed for Chapter 11 bankruptcy protection.
"Bedford is not on a plant list to close," said Fred Cox, communications/media relations manager for the Bedford and Indianapolis facilities. "Bedford will remain open."
He said that John Lancaster, manager of the local GM plant, was meeting with employees this morning.
In addition to the bankruptcy filing today, GM revealed 14 plants it intends to close. One of those plants, however, will be retooled to build a small car.
Today's bankruptcy filing comes as part of the Obama administration's plan to shrink the automaker to a sustainable size and will give a majority ownership stake to the federal government.
GM's bankruptcy filing is the fourth-largest in U.S. history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets.
GM will rely on $30 billion of additional financial assistance from the 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.
GM will follow a similar course taken by Chrysler LLC, which filed for Chapter 11 protection in April and hopes to emerge from its government-sponsored bankruptcy this week.
The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take a 12.5 percent stake, with the United Auto Workers getting a 17.5 percent stake and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out.
The downsized GM's brands will be limited to Chevrolet, Cadillac, GMC and Buick. Its Pontiac, Saturn, Hummer and Saab operations will be either sold or closed. GM said it was finalizing a deal to sell Hummer, and plans for Saturn are expected to be announced within weeks.
Trading of GM shares was halted early today after they plunged Friday as low as 74 cents, the lowest price in the company's 100-year history. GM will be kicked out of the Dow Jones industrial average because rules established by the News Corp. unit that oversees the index prohibit it from including companies that have filed for bankruptcy.
The third of the one-time Big Three, Ford Motor Co., has also been stung hard by the sales slump, but it avoided bankruptcy by mortgaging all of its assets in 2006 to borrow roughly $25 billion, giving it a financial cushion GM and Chrysler lacked.
The Associated Press contributed to this report.