GM to cut 21,000 U.S. jobs

DETROIT — General Motors could be majority owned by the U.S. government under a restructuring plan laid out Monday that will cut 21,000 U.S. factory jobs by next year and phase out the storied Pontiac brand.

The plan includes an offer to swap roughly $27 billion in bond debt for GM stock, leaving current shareholders with just 1 percent.

The GM bondholder's committee called Monday's offer a "blatant disregard of fairness," adding that GM and the task force would "rather discount the thousands of individual investors and retirees who own GM bonds than undergo earnest negotiations."

GM is living on $15.4 billion in government loans and said Monday it envisions receiving an additional $11.6 billion. But if GM's restructuring plan can't satisfy the government by June 1, the struggling company could go into bankruptcy protection.

GM said it will ask the government to take more than 50 percent of its common stock in exchange for canceling half the government loans, or about $10 billion, to the company as of June 1.

In addition, GM is offering stock to the United Auto Workers for at least 50 percent of the $20 billion that the company must pay into a union-run trust that will take over retiree health care expenses starting next year.

President Barack Obama's administration said in a statement that it has not made a final decision about taking stock for part of its loans.

GM also said it would speed up six additional factory closings that were announced in February, although it did not identify the locations. Henderson said there would be three more factory closings in 2010 beyond those six and plans to reveal the locations in May.

Including previously announced plant closures, the restructuring will leave GM with 34 factories at the end of next year, compared with 47 at the end of 2008.

The company also said it plans to reduce its dealership ranks by 42 percent to 3,605 by 2010. Part of that would come from the company phasing out its storied Pontiac brand no later than next year.