General Motors yesterday filed for Chapter 11 bankruptcy protection in New York, in a plan that seeks to allow the US auto giant to re-emerge as a new, leaner company within 60 to 90 days.
The company declared $172.81bn debt and $82.29bn assets.
While closing 14 more plants and axing 21,000 more jobs, GM is relying on an additional $30bn bailout from the US Treasury Department and $9.5bn from Canada.
GM has already had $20bn of low-interest loans from the US government.
The US government is taking a 60 per cent stake in the scaled down GM, the Canadian government a 12.5 per cent stake, the United Auto Workers a 17.5 per cent share and unsecured bondholders, ten per cent. Existing GM shareholders are expected to be wiped out.
To clear the way for Chapter 11 bankruptcy, GM sold off GM Europe which includes Opel, Saab and Vauxhall.
It reached a deal with the German government and Russian bank-backed Canadian car parts manufacturer, Magna on Sunday.
UK Business Secretary Mandelson claimed he had received further reassurance from GM that Vauxhall production would continue in the UK.
But Magna has said it does not have a production plan yet and Mandelson was forced to eventually admit that GM Luton will lose its contract to produce Renault vans.
Dave Wiltshire, National Secretary of the All Trades Unions Alliance (ATUA) was out campaigning in Luton town centre yesterday for a News Line–ATUA meeting (see page 2) to save the Vauxhall van factory in Luton through an occupation and a successful campaign for its nationalisation.
He said: ‘What has really shocked the workers in Luton is the news this morning from Peter Mandelson that Renault are now claiming that the change of ownership of GM Europe, will invalidate the contract they have with IBC Luton plant to procure Renault vans.
‘Yesterday Mandelson gave a radio interview in which he claimed that the Luton plant had a future until at least 2012 because of this contract.
‘In typical Mandelson fashion, what he says one day is shown to be completely untrue the following day.
‘All his promises that he has assurances from Magna about the future of Vauxhall in Britain are worthless.
‘It is abundantly clear to everyone now that this government has absolutely no interest to defend either the Vauxhall plant in Luton or Ellesmere Port, near Liverpool
‘Complementing Mandelson was the absolute inactivity and indeed invisibility of the trade union leaders.
‘Tony Woodley, joint general secretary of Unite, said at the weekend that he was fully aware of Magna’s plans and that they involved the closure of the Luton plant.
‘What he did not say is what the union leaders were going to do about it.
‘In fact, they will do nothing as they have done nothing to save any car plant or indeed any industry faced with closure.
‘These leaders must be removed.
‘The only fight now to save these plants must be to occupy to prevent their immediate closure and for a mass campaign to demand that these industries be nationalised without compensation and placed under control of the working class.
‘This agenda can only be met through bringing down Brown and going forward to a workers’ government that will carry out a socialist programme.’
