The Indianapolis Star from Indianapolis, Indiana • Page A6

business PAGE A6 THE INDIANAPOLIS STAR TUESDAY, JUNE 2, 2009 DOW JONES INDUSTRIALS BLOOMBERG INDIANA INDEX 8,721.44 221.11 NASDAQ 1,828.68 54.35 289.72 9.76 500 942.87 23.73 GN's bankruptcy era begins GOVERNMENT-LED CARMAKER SETS OUT ON NEW PATH TO GET LEAN, PROFITABLE ANALYSIS As investors, stakes are high for Obama and taxpayers STATE IMPACT Pensions safe for now, but will restructuring be a lasting legacy? By Jim Kuhnhenn Associated Press WASHINGTON President Barack Obama now owns General Motors, even though he insists he is only taking it out for a spin. Hours after the government sent GM into court Monday to file for Chapter 11 protection, Obama declared, "What I have no interest in doing is running GM." But with a 60 percent equity stake in the carmaker and $50 billion in taxpayer money riding on GM's success, the government is far By Ted Evanoff ted.evanoffindystar.com Facing a $20 billion hole in its pension funds, General Motors could return to bankruptcy court in a few years wrangling over the future of something nearly 100,000 Indiana residents depend on: a GM pension. The U.S. government steered GM into bankruptcy Monday in hopes a leaner automaker could survive the recession and power up profits when the economy rebounds. New profits from a hands-off investor.

Obama and his economic team stress that the government's goal is to get GM back on its feet, could easily fill the hole, but if the automaker's vehicles fail to excite buyers or the auto market remains flat, that $20 billion pension liability will remain. "You can't count on this being the only time they are in bankruptcy," warned pension expert 1 Treasurer Richard Mour-dock vows to fight a Chrysler merger on behalf of state funds. ALAN PETERSIME The Star TOUGH NEWS: Workers exited the GM stamping plant, 340 S. White River Parkway, West Drive, during a shift change Monday. GM said Monday the plant's shutdown will come sooner than it had announced previously.

INDIANAPOLIS STAMPING OPERATION GM plans to speed up plant closure White River President maximize the re-Obama faces turn to taxpayers political risks and exit quickly in efforts to from its involve-get GM back ment. But as one on its feet. administration official put it, there is an inevitable tension between those objectives. And the snap in that tension could sting politically for Obama, economically for the industry and fiscally for the taxpayer. A bankruptcy judge says General Motors can have immediate access to $15 billion in government financing as it attempts to restructure quickly under court protection.

U.S. Judge Robert Gerber gave interim approval to the Detroit-based automaker's use of a total of $33.3 billion in financing. He will rule June 25 on final approval of the financing. Gerber also set GM's sale hearing for June 30. How well a leaner GM adjusts See Obama, Page A7 Indianapolis Zoo anapolis site said he was saddened that the plant may close sooner than had been scheduled.

United Auto Workers Local 23 President James Kendall said the plant's 670 union workers took major contract concessions to try to keep the plant going. GM said two years ago that the plant near Downtown Indianapolis would close no sooner than 2011 and might be kept open. In Indiana, the automaker has about 6,000 workers at plants in Indianapolis, Fort Wayne, Marion and Bedford. Star report General Motors Corp. said Monday it will shutter nine more plants, including the Indianapolis stamping center that already was targeted for closing.

The closures, part of a cost-cutting effort as the automaker moves into bankruptcy, will displace 18,000 to 20,000 GM employees, including 1,050 in Indianapolis. Stamping plants in Indianapolis and Mansfield, Ohio, will shut down starting next year. A third one in Pontiac, will cease production by December 2010 but remain in standby status. Map data: ESRI, TeleAtlas The union president who represents workers at the Indi CHANGES AND THE GM FAMILY CARMAKER SHRINKING ITS OPERATIONS General Motors filed for bankruptcy protection Monday and will close several plants by the end of 2011, as part of the Obama administration's plan to shrink the automaker to a sustainable size and give majority ownership to the federal government. Douglas Elliott of the Brookings Institution, a think tank in Washington.

"Companies that come out of bankruptcy tend to be inherently risky." Autoworkers, investors, retirees and analysts sorted out the separate bankruptcy proceedings Monday by Chrysler and GM, a pair of destitute manufacturers in line to receive another $39 billion infusion from the White House. In the Chrysler case, a bankruptcy court judge approved plans for a merger with Italian automaker Fiat. The White House had pledged $6 billion to Chrysler if it could find a suitable partner. Monday's action helps open the way for the federal money. Meanwhile, Indiana state Treasurer Richard Mourdock vowed to spend at least $2 million to continue fighting the Chrysler merger.

He calls the Fiat deal worked out with the White House an illegal act because it neglects bankruptcy laws in place to protect bondholders that loaned Chrysler money. He oversees public funds that own $42 million worth of Chrysler bonds. In the General Motors bankruptcy, GM promised to maintain its health-care plans and the $100 billion commitments made by its pension funds. That reassured many pensioners, including Anderson retiree Ronnie Shell, 69, who worked nearly 35 nears in General Motors' Guide lighting plants. But he noted that the pension plan could be abandoned later.

"I think the thing that upsets me most about bankruptcy is the way they can do away with pensions or throw it back to the government and reduce it," said Shell, who retired in 1996. Elliott described the GM pension as safe right now. That's mainly because GM is passing into the control of two groups in favor of preserving the pension plan. Those are the U.S. government and the United Auto Workers.

The union will own 17.5 percent of the new GM, while the government will control 60 per- REMAINING GM FACTORY EMPLOYEES BY STATE XT Detroit Lansinql- I fair, 2i 1-500 501 1,001 5,000 5,001 10,001 and more BmZmX- Cle Indianapolis Kansas City St. Louis Philadelphia Cincinnati, wages, ends bonuses, eliminates certain work rules and requires binding arbitration for the next contract if a deal can't be reached. The UAW has said the cuts would save GM up to $1.3 billion a year. SUPPLIERS: GM's Chapter 11 filing is likely to deal another serious blow to parts suppliers. Delphi GM's principal supplier, is owed more than $110 million, according to a list of creditors in the bankruptcy filing, followed by suppliers such as Robert Bosch, Lear Corp.

and Johnson Controls. Parts suppliers accounted for a large number of Chrysler's top creditors when it filed for bankruptcy protection. Struggling suppliers could get help from the Treasury Department's $5 billion financing support program, designed to help suppliers keep parts flowing to GM and Chrysler. DEALERS: Last month, GM said it would reduce locations in its dealership network by 1,100 or one in five by not renewing contracts that expire next year. GM said the closures aren't final.

The automaker gave the targeted dealerships, which it has not named, until the end of May to object to the decision. Associated Press Nashville General Motors Chapter 11 bankruptcy will have consequences for everyone from its suppliers to customers to dealers. Here's a look at what it means for each of those groups: CAR BUYERS: President Barack Obama reiterated Monday that the U.S. government would back the warranties of GM and Chrysler vehicles. The company will dispose of its Pontiac brand and has been searching for buyers for its Hummer, Saab and Saturn divisions.

Under the cover of Chapter 11, GM will have an easier time shedding these businesses. For consumers who want to continue buying GM cars, that leaves a choice among Cadillac, Chevrolet, GMC and Buick. WORKERS: The United Auto Workers trust that will take over GM retirees' health-care costs will receive a 17.5 percent stake in the restructured company and have the option to buy an additional 2.5 percent stake at a discount once GM reaches a certain value. To help fund its health-care costs, the union will also get $6.5 billion in preferred shares that pay 9 percent interest and a $2.5 billion note. The new agreement, which GM workers ratified last week, freezes 4 I ba ti o' GM FACTORIES TO CLOSE, BY NUMBER OF EMPLOYEES Can I i lie Dnfnci 1 UUcllklJUcllU 100 500 1,000 1,500 lb Mexico v.rcy jioiuca -THf Associated Press See Legacy, Page A7 I Vj) I liy I On select Bridgestone or Firestone Tires indytire.com for locations BUT I IKE 9 ppp ugr, Ttpestone SSKs "Must present coupon.

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