General Motors files for bankruptcy

America's largest carmaker General Motors on Monday filed for bankruptcy protection but asserted that it would be business as usual in India.
    
Globally also a new and stronger GM would emerge within the next two-three months, the company said.
    
Making it America's fourth biggest ever bankruptcy and the biggest in the industrial sector, GM today filed for Chapter 11 bankruptcy protection in a New York court, as part of the Barack Obama administration's restructuring plan for the iconic auto giant.
    
Hit by the global recession and plunging sales, GM has become one of the biggest collapses in the corporate history, but it hopes the bankruptcy restructuring would result into a new GM with substantially less debt and operating cost. It expects the whole exercise to be completed within 2-3 months.
    
"We believe this step -- which was taken with the support of the US government -- is the most efficient and effective means for GM to quickly achieve a competitive and profitable future," GM Group Vice President Nick Reilly said.
    
At the same time, GM's India arm said that it would remain unaffected from the bankruptcy and the company would continue to do normal business in the country.
    
"GM India operations are not included in the US filing for Chapter 11. Consequently, all GM India dealers, warranty and customer support services will remain unaffected and continue to function as normal," GM India said in a statement.
    
The company said it would go ahead with the launch of its luxury sedan Chevrolet Cruze, besides introducing a "mini car" in the Indian market by the end of this year.
    
NRI billionaire Lakshmi Mittal-led ArcelorMittal, the world's largest steel maker, figures among the 50 largest creditors to whom GM owes a total of 173 billion dollars, as per the bankruptcy filing documents.
    
The other major creditors are employees union UAW, Bank of New York Mellon, ExxonMobil, Deutsche Bank, AT&T and Goodyear Tyres and computer maker HP.
    
Experts said that the bankruptcy would not affect the business in India, but the consumer sentiment could be adversely affected due to developments in the US, which in turn could lead to some impact in India, as in any other country.
    
Ernst and Young's automotive sector national leader Rakesh Batra said: "Indian operations are not part of the bankruptcy filing. GM India is an independent company as far as its business in concerned. But its sales in the coming months will depend on customers' reaction and sentiments in response to the bankruptcy filing."
    
At the stock market also, the investors sentiment took a hit as GM's share price plunged 32 per cent in the first half-an-hour of trading today after the company filed for bankruptcy.
    
The New York Stock Exchange has said that stocks of the auto maker would be delisted from the bourse before trading opens on June 2. The scrip of General Motors, which has already slipped below the one-dollar mark, was trading at just 51 cents on Monday after reaching an intra-day low of 27 cents, lowest in its history.