General Motors Corp. has filed for Chapter 11 bankruptcy protection with the hopes of swiftly reorganizing and emerging leaner and less burdened by debt and labor costs.
The filing will have consequences for everyone from its suppliers, to customers, to dealers.
Here's a look on what it means for each of those groups:
CAR BUYERS: President Barack Obama first said the U.S. government would back the warranties of GM and Chrysler vehicles in March. On Monday, he reiterated that commitment.
"I want to remind everyone that if you are considering buying a GM car during this period of restructuring, your warrantees will be safe and government-backed," Obama said.
GM is likely to emerge a significantly scaled-back automaker, assuming its bankruptcy proceedings go according to the company's plans. The company has already said it 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.
That doesn't mean those brands will disappear altogether. GM has said it will sell Saab and Hummer, while plans for Saturn are expected to be announced within weeks. Vehicles produced by those divisions could continue selling in the U.S. by different owners. Pontiac, however, will disappear by next year.
For consumers who want to continue buying GM cars, that leaves a choice between Cadillac, Chevrolet, GMC and Buick.
As for their financing needs, car buyers will still be able to turn to GM's former financing arm, GMAC LLC. GMAC last month received another cash injection of $7.5 billion from the U.S. government and has recently taken over financing duties for Chrysler.
In the long term, buyers should see a lineup more weighted toward smaller, more fuel-efficient cars rather than trucks and SUVs. Development of those vehicles will be prodded along by the Obama administration, which has set a goal of emission limits and more stringent fuel economy standards of 35.5 miles per gallon by 2016.
WORKERS: GM and the United Auto Workers union have struck a new agreement aimed at reducing the automaker's staggering labor costs.
Under the agreement, the UAW's trust that will take over 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 the company 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 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 $1.2 billion to $1.3 billion a year.
All this is aimed at bringing GM's labor costs in line with those of foreign-owned automakers while still preserving retiree health care benefits. The UAW's retiree health care trust, called the Voluntary Employee Beneficiary Association, will get a seat on GM's board.
The new agreement, however, will not keep GM from cutting additional jobs. The automaker on Monday announced it will permanently close nine more plants and idle three others to trim production and labor costs under bankruptcy protection. The closures will displace 18,000 to 20,000 GM employees, the company said.
Workers learned of the closings Monday. They will lower GM's U.S. factory count to 34 by the end of 2010, from 47 at the end of 2008. The company will shutter an additional plant by the end of 2012.
The company has already said it will shut down 13 of its plants for about nine weeks each, on average, during the summer and will also offer more buyout and early retirement packages. GM has about 61,000 hourly and 29,000 salaried workers in the U.S.
SUPPLIERS: GM's Chapter 11 filing is likely to deal another serious blow to parts suppliers, which have been suffering as automakers slash production to cope with weak auto sales.
Delphi Corp., 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 GmbH, Lear Corp. and Johnson Controls Inc.
Delphi, a former GM subsidiary which has operated under bankruptcy protection since 2005, has received hundreds of millions of dollars from GM. Delphi has been in talks with the Obama administration's automotive task force to help bring it out of bankruptcy by June 2.
On Monday, GM and Delphi announced a plan for the parts supplier to emerge from bankruptcy by selling some U.S. plants and Delphi's global steering business to GM. Most of Delphi's global business operations will be sold to a private-equity firm, Parnassus Holdings II LLC, an affiliate of Platinum Equity
Visteon Corp., the top supplier to Ford Motor Co., and Metaldyne Corp., both filed for bankruptcy protection last week. Industry officials have warned that other suppliers could be forced into Chapter 11.
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.
The program, originally announced in March, will provide government guarantees for the financing of auto parts that have been shipped to the Detroit carmakers but have not yet been paid for.
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.
However, the dealership closures could be greatly accelerated in bankruptcy protection. One of the benefits of Chapter 11 for GM is that it allows the automaker to throw out the franchise agreements that make it difficult to close dealerships. All it takes is a judge's approval.
Chrysler has already set a precedent. Last month, that automaker asked a bankruptcy judge to close 800 of its dealerships. The dealers are objecting to the decision, but if the judge approves the motion at a hearing scheduled June 3, the dealerships will begin winding down right away.