Friday, June 5, 2009

Management will call shots at GM, not government: Obama

The U.S. government will be a hands-off owner of its stake in a revamped General Motors, says U.S. President Barack Obama.

He made the comments Monday after the automaker filed for bankruptcy protection.

Under the bankruptcy filing, the U.S. Treasury gets 60.8 per cent of the common equity of the new, revamped GM.

The Canadian and Ontario governments will take an 11.7 per cent stake in GM, and a United Auto Workers trust for health-care expenses would get 17.5 per cent, according to the reports.

Bondholders would receive a 10 per cent stake with the possibility of increasing their share to 25 per cent.

The U.S. government will pump about $30 billion US into GM, on top of the roughly $20 billion is has already contributed.

"We are acting as reluctant shareholders because that is the only way to help GM succeed," Obama said during a White House news conference.

Obama said GM will be run by a private board of directors and management team

He said management, and not the government, will call the shots and make the decisions about how to turn the company around.

"The federal government will refrain from exercising its rights as a shareholder in all but the most fundamental corporate decisions. When a difficult decision has to be made on matters like where to open a new plant or what type of new car to make, the new GM, not the United States government, will make that decision," he said.