DETROIT, Michigan (AFP) - - A new General Motors emerged from bankruptcy Friday under a government-backed plan to rescue the troubled US car giant and create a leaner firm to compete in a difficult auto market.
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The automaker transferred its main assets to a new government-supported car company under a plan financed by the administration of President Barack Obama and the Canadian government.
The fast-track plan, similar to the one used to rescue Chrysler, creates a new auto company that took over the main producing assets of the automaker, while the old GM will remain under bankruptcy court supervision.
"Today marks a new beginning for General Motors, one that will allow every employee, including me, to get back to the business of designing, building and selling great cars and trucks and serving the needs of our customers," said Fritz Henderson, who remains GM president and chief executive.
The "new GM" will be a leaner, smaller company after having shed tens of thousands of workers, eliminated or sold storied brands, shuttered scores of factories and rewritten its labor contracts to slash costs.
GM will keep four key brands -- Chevrolet, Cadillac, Buick and GMC -- and will have a total of just 34 US nameplates by 2010. Several brands owned by the old GM, including Saturn, Hummer, Opel and Pontiac, have been shed or are being sold.
The chairman of the new GM is Edward Whitacre, who headed telecommunications giant AT&T.
"I intend to play an active role," Whitacre told reporters after the announcement.
"I'll be more active than most chairmen," said Whitacre, who has no experience in the automobile industry but spent 18 years at the telecom giant.
"I need to make sure value is created ... We have to pay the government back."
GM is also removing layers of management -- reducing the number of US executives by 35 percent and overall US salaried employment by 20 percent by the end of this year.
"GM is fortunate to get another shot, most likely its last one," said Michelle Krebs, an analyst with the research firm Edmunds.com.
"Its biggest challenge remains the same one it has faced of late; that is, convincing consumers -- now also GM's reluctant shareholders -- that the company truly is changing and understands what type of vehicles the marketplace demands."
Sean Maher at Moody's Economy.com said GM "still faces a difficult year."
"The company does not expect to turn a profit in 2009 and is unlikely to do so until US new vehicle sales rise substantially above their current depressed pace below 10 million per year," he added.
Once the world's largest corporation, General Motors sold more vehicles than any other automaker from 1931 through 2007, after which it lost the crown to Japan's Toyota.
The new GM emerges just weeks after a similar government-backed effort to rescue number-three US automaker Chrysler under a plan that gave Italian automaker Fiat a large stake and operational control.
For GM, the new firm will be unencumbered by the bulk of the massive debt load it racked up during years of bleeding balance sheets.
GM entered bankruptcy protection on June 1 with liabilities of 172.8 billion dollars and emerged with 48.4 billion in debt.
The US government -- which has provided some 50 billion dollars in financing -- received a 60.8 percent stake in the new firm called General Motors Company.
Canada, which provided 9.1 billion dollars in loans, has an 11.7 percent stake and a United Auto Workers union retiree healthcare trust fund holds 17.5 percent.
Canadian Industry Minister Tony Clement said officials are "confident that the company will now be in a position to operate a sustainable and viable business that will keep production, innovation and jobs in Canada."
Creditors holding about 54 percent of GM bonds agreed to a plan that would swap 27.1 billion dollars in debt for a 10 percent stake and warrants allowing them to buy an additional 15 percent stake.
Obama, whose auto taskforce spearheaded the GM restructuring plan, has said his administration has no intention of nationalizing the automaker over the long term and will not be participating in its day-to-day operations.