Wednesday's Headlines: Automakers

Wednesday's Early Headlines

• GM Bankruptcy Expected Within Days. - Bondholders rejected an offer of a 10% stake in a restructured General Motors (GM Quote) in return for their $27 billion in debt, setting the stage for the largest corporate bankruptcy in U.S. history. The government could emerge as owner of nearly 70% of the new GM if a tentative deal between the automaker and the United Auto Workers is ratified by union members. That deal provides that the union would own up to 20% of GM, instead of the 39% proposed in the company's most-recent restructuring plan. Shares of GM sank 11% ahead of Wednesday's opening bell.

• Introducing the New Chrysler. - Chrysler will ask a bankruptcy court judge Wednesday for permission to sell the bulk of its assets to a group headed by Italy's Fiat in hopes of saving itself from liquidation. Meanwhile, CNBC reported that Chrysler could exit Chapter 11 bankruptcy protection soon, perhaps as early as next week, according a person familiar with discussions between the federal government and the auto maker.

• NABE: Recession to End in Third Quarter, Bumpy Recovery. - The National Association for Business Economics said a survey of business economists showed the U.S. recession will probably end in the third quarter, although the recovery will be weaker than previously expected. The U.S. economy will shrink at a 1.8% annual rate from April to June, and then grow at a 0.7% pace in the next quarter, the survey showed. Growth will accelerate to a 1.8% rate by the final quarter of 2009. ...