The Obama administration will provide General Motors with about $30.1 billion in additional federal assistance and claim a 6o% share of the automaker as part of a deal that will enable the company to file for bankruptcy, senior administration officials said Sunday night.
Including previous commitments, the sum brings the total in federal outlays to General Motors to just under $50 billion.
The officials, who briefed reporters by conference call, took pains to emphasize that the government was a “reluctant” shareholder in the company and that its stake will be sold as soon as conditions warrant. They said the government decided to take the stake in the company in order to try to ensure that as much money as possible is returned to the Treasury.
The officials outlined parameters for the government’s participation in the retooled company, saying the role would be similar to that played in other companies the government takes a share in as part of its effort to rescue various failing businesses.
In addition to being a reluctant shareholder intent on selling out as soon as possible, the government will act in a “hands-off, commercial manner,” eschewing involvement in day-to-day management. No government employees will serve on the boards or be employed by GM or other companies partially owned by the government.
Nevertheless, the government will play a role in selecting key players, voting on the selection of a board of directors and play a role in other “core governance issues,” like major events or transactions.
Administration officials expect a new GM to emerge from bankruptcy in about 60-90 days with a substantially revamped board of directors, the administration officials said.