General Motors Sinking towards Bankruptcy: 5000 Jobs in US at Risk

BBC has reported that Senior executives at General Motors are expected to meet later to discuss proceedings for a widely expected filing for bankruptcy protection.

The Executive  are likely to firm up the details of how to completely restructure what was once the world’s largest car company, under judicial supervision.

GM’s sales have been hit hard by the financial crisis and the firm has received $20bn (£12bn) in state aid.  Obama administration had given GM a 1 June deadline to either submit a revival plan or go bankrupt.

This bankruptcy filing by GM would be one of the largest bankruptcies in US history. GM’s European arm, which makes the Vauxhall and Opel brands, will likely be spared bankruptcy following a deal by Canadian car parts maker Magna to buy GM Europe.

Unions fear that jobs may be lost at Vauxhall plants in Luton and Ellesmere Port, which employ 5,500 people.

As its stock tumbled to a stunning 75 cents a share, General Motors Corp. tied up several loose ends Friday as it prepares to file for bankruptcy reorganization Monday.

The Detroit automaker locked in a labor deal with the UAW that the union says will save GM as much as $1.3 billion a year. Germany’s finance minister said a plan was approved for Canadian auto supplier Magna to move ahead with a rescue of GM’s European Opel division.

The 100-year-old automaker even scheduled a news conference for midday Monday in New York City — the place where most observers believe GM will file for Chapter 11.

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