On Monday, April 27, General Motors announced the planned phase-out of its Pontiac brand, the elimination of 23,000 jobs by 2011, and a 40% reduction of its dealer network in a last-ditch effort to avoid bankruptcy proceedings.

According to the provisions of this latest restructuring plan, the federal government and the United Auto Workers union would, in effect, own 89% of General Motors. The Treasury Department would accept GM stock as repayment for $10 billion in federal loans as would UAW controlled trust funds.

GM bondholders have been offered 255 shares of stock for every $1000 owed in principal, which amounts to $24 billion of the company's unsecured debt of $27 billion. If bondholders do not agree, it is highly unlikely that bankruptcy can be avoided.

In the event of a bankruptcy, the company would likely be split into two halves, with the viable division retaining Chevrolet and Cadillac. The company's toxic assets would go into a "bad" GM slated for liquidation.

The Obama administration, which rejected GM's previous plan in February, said the new plan "reflects the work GM has done since March 30 to chart a new path to financial viability." However, the government task force, "has made no final decision regarding the treatment of its current loan to GM or with respect to any future investments in the company."