In a defining moment for American capitalism, President Barack Obama ushered General Motors Corp. into bankruptcy protection Monday and put the government behind the wheel of the company that once symbolized the nation’s economic muscle.

The fallen giant, the largest U.S. industrial company ever to enter bankruptcy, is shedding some 21,000 jobs and 2,600 dealers. Sparing few communities, the retrenchment amounts to one-third of its U.S. work force and 40 percent of its dealerships.

 

“We are acting as reluctant shareholders because that is the only way to help GM succeed,” Obama said of the temporary nationalization of the 100-year-old company.

Obama lauded what he called a “viable, achievable plan that will give this iconic American company a chance to rise again” as GM followed Chrysler LLC into bankruptcy court. Of Detroit’s “Big Three” automakers, only Ford Motor Corp. has avoided bankruptcy restructuring and has not taken federal bailout money.

The prepackaged GM bankruptcy deal — crafted by the administration, the company, the United Auto Workers union and a group of bondholders — would give the U.S. government a 60 percent controlling stake in what was once the world’s largest automaker. An additional 12.5 percent would be under Canadian government ownership.

“What I have no interest in doing is running GM,” Obama said. His only goal, he said, was to get GM back on its feet and then “to get out quickly.”

“Ultimately, I think that GM is going to be a strong company, and we are going to be pulling out as soon as the economy recovers and they’ve completed their restructuring,” he said. “My hope … is that we will see both GM and Chrysler having emerged from this restructuring process leaner, meaner, more competitive with a set of product lines that appeal to consumers, good cars that are fuel efficient and that look at the markets of tomorrow.”

Obama also predicted a rebound in the automotive market when the economy recovers.

“You are looking at a substantial market that is going to be available for U.S. automakers if they’ve made some good decisions now, and if they are building the kinds of fuel-efficient, high-performance cars that American consumers are hungry for,” he said.

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Note:  This article has been authored by Mrinalini aka Meenu (as we fondly call her), who has accepted my request to be a Guest Author at Umennet. She has been my one of the best friends, knows me in n out. Has been my, philosopher and guide too. Meenu has worked as  a recruitment HR with an MNC, Recently married and settled in Atlanta, US of A. She has her own set of rules, her own observation and her own conclusions.  So, to have a new look towards everything, I requested her to be a guest author which she happily agreed. I am sure this new relation as a blogger would really last long. I would prefer saying – forever!!!