by
Autonet Insurance
| May 31, 2009
US car giant General Motors is to file for bankruptcy protection, the largest industrial bankruptcy in US history and the fourth-largest ever.
The company, which introduced the idea of a "car for every purse and purpose", will be taken over by the US Government, which will take a 60% ownership stake.
President Barack Obama is expected to address the nation informing them of the plans, which also include providing the Detroit company with an additional £19 billion to help it emerge from bankruptcy.
However, a congressional official said that despite the financial backing, the Government will remain committed to staying out of the carmaker's business decisions.
A second source said the Canadian Government will take a 12.5% stake in GM and a United Auto Workers trust for health care expenses would get 17.5%.
Bondholders are expected to get a 10% stake, but this could rise to 25%.
GM, which is one of America's largest employers, has already received £12.5 billion from the US Government since Obama took office.
The future of thousands of workers at Vauxhall, which is owned by GM Europe, remains uncertain despite a proposed deal by Canadian car parts maker Magna International to buy GM Europe's Vauxhall and Opel brands.
© Press Association 2009