General Motors shares dropped below 1 dollar today as the country's largest car maker nears bankruptcy, while shares were going for 90 cents on Wall Street, according to dpa. With the US government expected to take over more than 70 per cent of the country's largest car maker, shareholders must reckon that value will drop to zero. Intense discussions with creditors continued as the Monday deadline approached - the date by which GM must show the government it is financially viable or enter bankruptcy. Giving a glimpse of future plans as it adapts to the need for more fuel efficiency vehicles, GM Friday announced it would retool a mothballed factory to produce a new small car to add to its fuel efficient fleet that includes Chevrolet Cruze and Volt. Plans call for production of 160,000 vehicles from the reopened, re-tooled assembly plant that could also handle compact cars. GM's expected journey through bankruptcy protection will be the fourth largest ever in US financial history. The company has already received 20 billion dollars from Washington to keep head above water, and is expected to receive another 30 billion dollars. In exchange the government is to get 72.5 per cent ownership in the vaunted century-old company that has lost its status as world's largest producer to Japan's Toyota. Creditors are being offered a 10 per cent stake in the company with the ability to buy another 15 per cent later, in exchange for giving up the 27 billion dollars owed them by GM. One group representing 20 per cent of the creditors has reportedly signed off on the deal, but there were 300 challenges filed in bankruptcy court against the plan. The United Auto Workers are to receive 17.5 per cent of the company in exchange for concessions on benefits and wages. After all is done, including the impending sale of GM's European Opel concern to Canadian car parts manufacturer Magna, GM's workforce is expected to drop another 35,000 people for a total of 200,000 remaining employees with the closure of another 14 assembly plants - or about half its work force from a decade ago. Through bankruptcy, the new GM company is to throw off the debt weighing down its ability to streamline production and workforce and develop newer, more fuel efficient cars being demanded by North American drivers.
