GM goes for broke

General Motors announced plans Monday to cut 23,000 U.S. jobs by 2011, drop its storied Pontiac brand and slash 40% of its dealer network in its latest bid to stay out of bankruptcy.

[efoods]The new restructuring proposal will leave the Treasury Department, and thus U.S. taxpayers, owning a significant stake in GM. Treasury would accept GM stock, rather than cash, for repayment of about $10 billion that the government has already lent to GM.

Trust funds controlled by the United Auto Workers union would also hold a significant shake in the company. Between them, Treasury and the unions would own 89% of GM.

GM also announced an offer to its bondholders to swap $24 billion of the company’s $27 billion in unsecured debt for stock. GM is offering bondholders 225 shares of its stock for every $1,000 it owes the bondholders in principal.

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