GM China to continue operations under new GM

Shanghai, July 7 (Gasgoo.com) GM China Group said in a statement on Monday that an U.S. Bankruptcy Judge has approved the sale of GM's assets to a government funded new GM, allowing the company's most profitable assets to exit bankruptcy protection under government ownership.

Robert Gerber of the U.S. Bankruptcy Court for the Southern District of New York in Manhattan said the sale was GM's only option and that completing it would 'prevent the death of the patient on the operating table.'

The new company's most profitable assets will consist of four brands — Chevrolet, Cadillac, GMC, Buick and GM subsidiaries outside the United States, including its operations in China and the rest of Asia Pacific, which are expected to continue to operate without interruption.

The government would own 61% of GM, the Canadian government would get 12%, and the United Auto Workers would own 17.5% through a trust covering retiree medical benefits. The rest would go into the old GM to pay back bondholders and other creditors.

"The launch of the new GM will have a positive impact on GM's operations across China," said GM China Group President and Managing Director Kevin Wale. "It will enable us to continue to take advantage of our company’s global resources through the introduction of exciting new products and the expansion of our presence in this important market."

GM, which struggled with a sharp decline in U.S. auto sales, has received $19.4 billion in federal loans this year before filing for Chapter 11 bankruptcy protection on June 1. The U.S. government had said it would not provide another $30 billion by the end of the year if a deal were not approved by July 10.