Obama Making Big Political Bet on GM

President Barack Obama has hitched his presidency to the fate of General Motors(GM Quote).

Events Thursday made it more clear than ever that the administration, not the automaker's management, is driving GM -- some are calling it "Government Motors" -- into bankruptcy court. After the reorganization, the Treasury will initially own 72.5% of the company.

Obama is expected to talk about GM on Monday, the day of a widely anticipated bankruptcy filing, said press secretary Robert Gibbs. An administration official, rather than GM executives, briefed reporters on details Thursday. Additionally, the White House announced that eight cabinet members, as well as other top administration officials, will travel throughout the Midwest Tuesday through Friday to try to sell the plan, or, as its statement said, "to discuss federal recovery efforts for auto communities and workers."

Meanwhile, as it prepared to file what may be the most historic bankruptcy in U.S. history, GM had little to say Thursday, issuing a terse press release headed "GM Statement on U.S. Treasury's 363 Sale Proposal."

The statement began: "The U.S. Treasury proposal announced today provides incentives for GM's unsecured bondholders to support GM's restructuring efforts in the event GM decides to pursue a 363 sale as part of a bankruptcy proceeding." (A 363 sale is an expedited bankruptcy filing in which a company spins off viable assets into a new company.)

The company said it "appreciates the unwavering support of the U.S. Treasury and the President's Task Force on Autos."

The tentative deal brokered by the Treasury means that unsecured bondholders will back the bankruptcy filing in return for 10% of the equity in a new GM, as well as warrants to purchase up to 15% more. Their support would enhance the prospect for rapid bankruptcy court approval.