GM Races Toward Bankruptcy

After prolonged suspense, it appears the U.S. is steering General Motors into bankruptcy next week in a plan that will shrink the company while also pumping billions of dollars of public financing into it. The U.S. will inject somewhere around $30 billion more into GM in return for 50 percent of the restructured company and the right to name members to the board of directors. The U.S. plans to lift Chrysler out of bankruptcy in the coming weeks, hoping that both companies will transform themselves into leaner competitors in the global marketplace. Bankruptcy was a last resort—the administration negotiated for months with the union, creditors and dealers in the hopes of reducing costs without going to bankruptcy court.