U.S. Reportedly Steering GM to Bankruptcy

The Obama administration is preparing to send General Motors into bankruptcy under a plan that would give the automaker just short of $30 billion more in public financing, a report says.

Author:: Joseph Woelfel
Publish date:: May 22, 2009 2:20 AM EDT

Updated from 12:50 a.m. EDT

The Obama administration is preparing to send

General Motors

(GM) - Get Report

into bankruptcy under a plan that would give the automaker tens of billions of dollars more in public financing, the

Washington Post

reports, citing sources familiar with the discussions said.

Under the GM draft bankruptcy plan, the company would receive just short of $30 billion in additional federal loans, the newspaper reports, citing a source.

The figure is a starting point in negotiations between the government and the company, the source said, and could change as could the timing of a filing, the

Post

reports. A cash injection that large would boost the U.S. investment in GM to nearly $45 billion.

The government previously indicated it planned to take at least a 50% stake in the restructured company, and likely would take the right to name members to its board, as it has at

Chrysler

, where the government will control four of nine seats, according to the newspaper.

The plan for GM comes as the administration prepares to lift

Chrysler

from bankruptcy protection as soon as next week, the

Post

said, citing industry sources.

Reuters

reports the Obama administration has no plans to push GM into bankruptcy next week and the outcome of the automaker's restructuring efforts may not be known until a June 1 deadline. The report cited a source familiar with the situation.

A U.S. Treasury spokeswoman declined to comment for

Reuters

The Treasury is continuing to work with GM on its restructuring, and while the situation could change, there were no plans for a GM bankruptcy filing next week,

Reuters

reports, citing the source who wasn't authorized to speak publicly about the matter.

Meanwhile, a separate report from

Bloomberg

says GM may get a fourth offer for its Opel and Vauxhall operations in Europe after a Chinese carmaker submitted an expression of interest.

The Chinese company sent a letter a day after the May 20 deadline for bids, said people familiar with the matter,

Bloomberg

reports. A specific offer may not materialize, said the people, declining to name the company.

Italian car maker

Fiat

, Canadian auto-parts maker

Magna International