Car giant General Motors on brink of going bust

The world's biggest car company was teetering on the brink of going bust last night.

• General Motors was in ‘earnest’ preparations to file for bankruptcy.
• The move puts thousands of jobs at risk at Vauxhall, as GM is its parent company.
• The news came as workers at Jaguar Land Rover and Nissan in Sunderland were celebrating a £720million bailout by the European Investment Bank.
• The Government is backing £500million of the cash which goes directly to the UK.
• GM’s American bosses want to split the
  ailing firm in two – a ‘new’ company made up of the most successful units, and an ‘old’ one of its less-profitable ones.
• The plan is ‘gaining momentum’ and is seen as the most sensible configuration, said sources.
• Vauxhall and Germany’s Opel form the lion’s share of General Motors Europe which is seeking to break away from the U.S. company.
• GM Europe is seeking £3.3billion in loans and financial guarantees from European governments to help it survive until 2011.
• Vauxhall will ask for around £500million in loans or loan guarantees to support the breakaway.
• At stake are around 5,000 jobs at its Ellesmere Port plant in Cheshire and the van-making factory in Luton, as well as up to 60,000 spin-off supply jobs.
• Analysts say filing for so-called Chapter 11 bankruptcy in America, which gives companies a degree of protection and a breathing space from creditors, could help GM restructure its debt and force changes to contracts.