Does this mean GM is going out of business?

Absolutely not! GM has entered chapter 11 to launch the New GM through the powerful tools of the Bankruptcy Code. GM will take the necessary actions to transition operations and launch a highly competitive New GM. Importantly, GM has the support of the U.S. and Canadian governments and the UAW in this effort.

What are some key attributes of chapter 11?

Some key Chapter 11 attributes are the following:
• Chapter 11 is not a declaration of insolvency.
• Companies don’t file chapter 11 to liquidate; they do so in order to continue operating and to take the necessary steps to emerge as a financially stronger business, reorganizing their operations or balance sheet or in some cases by selling substantially all its assets.
• Management remains in control of the business during the chapter 11 rehabilitative process. Trustees, administrators and monitors typically are not appointed.
• Chapter 11 normally does not cause interruption to business operations.
• The company is given breathing room during the process - an “automatic stay” generally prevents parties from taking legal action against the company or taking the company’s assets.

What is section 363 and how is it being used to launch the New GM?

Section 363 permits a company in chapter 11 to sell assets and in some cases substantially all its assets. GM intends to use that ability to sell the strongest parts of its business to launch a new and successful enterprise. The purchaser’s business will be built upon only the strongest parts of our business - our employees; our best brands (Cadillac, Chevrolet, Buick, GMC), and the plants and other hard assets that those brands rely on; the contracts we need to secure supplies and keep our business moving; and the equity we own in our domestic and global subsidiaries. The New GM will be led by GM’s current management team.

How is the New GM being launched?

It is anticipated that the valuable assets of GM will be sold to a new entity to quickly launch a leaner, more customer-focused and more cost-competitive automaker, with a much stronger balance sheet that is positioned for profitability. The New GM will be built from GM’s strongest brands and operations.

Will the chapter 11 be completely over after New GM exits?

An important advantage of the 363 process is that it allows the New GM to quickly make a clean and complete break from chapter 11. When the New GM launches, the chapter 11 case will be over for all of the operations that GM customers interact with. For GM’s operations that will not become part of the New GM, the chapter 11 case will continue in order to resolve creditors’ claims and wind down those operations in an orderly way.