GM moves much closer to bankruptcy

The one-time lion of American industry is inching closer to bankruptcy this morning:

General Motors on Wednesday prepared to face the fallout from a failed debt exchange that sends the largest U.S. automaker closer to a bankruptcy filing expected by the end of the month.

GM bondholders had until midnight to trade $27 billion in debt for a 10-percent ownership stake in the reorganized company that U.S. officials have said could emerge from a quick trip through bankruptcy court.

As the deadline passed early on Wednesday there was no immediate word from GM on how much debt the offer had succeeded in retiring. The Treasury also had no immediate comment.

So many members of Congress doggedly protected the auto industry from forced innovation. Rep. John Dingell comes to mind. He chaired the powerful House Energy and Commerce Committee for years and fought legislation aimed at the auto industry. Oh, and his wife works for GM. Republicans did the auto industry's dirty work on issues like health care reform back in the 90s. All those powerful friends on Capitol Hill helped bring GM to where it is.

And, we're all going to end up owning GM now:

In better times, many employees of General Motors called their company “Generous Motors” because of its rich benefits.

Now G.M. may stand for something else: Government Motors.

The latest plan for the troubled automaker, which is expected to file for bankruptcy by Monday, calls for the Treasury Department to receive about 70 percent of a restructured G.M.