That old joke about Government Motors? It could become reality within the next couple of weeks according to a Reuters report published today.
The report says that the current bankruptcy plan calls for General Motors to move its "good" assets to a new company owned by the government. The "bad" assets would remain in bankruptcy in order to pay off debts.
In order to give the new company a running start, the government would not only extend a line of credit to the "new" GM, it would also forgive the $15.4B in loans it gave GM over the last few months. Nice huh?
Eventually the company would be handed over to the UAW and GM's bondholders. Fritz Henderson would likely run the new company according to the unnamed source. How this will fix GM's problems is still up for debate. It's still possible that GM could avoid bankruptcy altogether. Maybe.
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