General Motors Corp. filed for Chapter 11 bankruptcy early Monday, marking the humbling of an American icon that once dominated the global car industry and setting up a high-stakes gamble for U.S. taxpayers. (See the Chapter 11 filing.) The bankruptcy filing, made in the U.S. Bankruptcy Court in Manhattan, marks the climax of a lengthy debate over the auto maker's future after it sought a bailout from the U.S. government in December to stay alive.
In the end, GM couldn't complete its restructuring out of court and filed for bankruptcy-court protection to get billions more in aid from U.S. taxpayers. The question now facing 56,000 auto workers, 3,600 GM dealers and the Obama administration: Will it work?
The U.S. government has agreed to provide GM with another $30 billion in aid, in addition to the $20 billion the auto maker has already borrowed, to see it through its restructuring and exit from bankruptcy protection. In return, the government will get a controlling stake in the company. The Canadian and Ontario governments are putting in $9.5 billion for a 12.5% stake.
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