GM will file for bankruptcy by June. The company to be divided

On Tuesday the largest U.S. automaker General Motors said that there is a possibility it could file for bankruptcy by June after its previous restructuring plan was rejected by the U.S. government as insufficient. According to the Reuters reports one possible plan for GM includes quick forming of a new company of the automaker's most profitable parts, while a group of other units would remain under bankruptcy protection for a longer period.

Under the plans for restructuring GM would move its most profitable units into a new company separate from its other divisions in the early days of its bankruptcy filing. As for the old components of the company not included in the new GM, such as Saturn and Hummer, they would remain in bankruptcy over a longer period of time to be sold or wound down.

Meantime within the period of time left before the filing the company is to settle its issues with the United Auto Workers union and bondholders. To date GM have achieved deep concessions with the union on healthcare and entry-level wages, but negotiations are ongoing over the fate of its obligations to 775,000 retirees. The union is reportedly to seek some compensation for certain retiree benefits the company plans to reduce or eliminate. The compensation may be provided in the form of a stake in the new GM, cash from a sale of the new GM, or any other source of funds.