This plan was to be turned in to the government within 60 days; now those days have come and gone and no acceptable plan was provided. Where does that leave us? According to bankruptcy information made available Monday, the US tax payer will now own 60% of General Motors at the cost of roughly $50 billion dollars.

Shortly, after GM made the historic bankruptcy announcement President Obama stated that he was confident that any bailout for GM was justified by changes made at GM. As of this last Monday, the company had $82.3 billion in assets and liabilities of $172.8 billion; a shortfall of $90.5 billion dollars. Obama went on to ensure taxpayers that the company would not need additional government help in the future, and would not be at risk of failure after it emerged from bankruptcy  GM’s bankruptcy filing indicated that it was $90.5 billion dollars short of being able to balance assets with liabilities. Also on Monday, the US government gave GM an additional $30 billion dollars and said the company would need no additional government help in the future.

Old GM” assets will begin to be purchased by “New GM” within the next 90-120 days. By October or November New GM will be a private company also called General Motors which tax payers will hold a 60% stake in. After this, New GM will be brought public through an IPO by mid to late 2010. At this time government auto task force leader Steve Rattner believes that as much as 10% of government holdings will be able to be paid back. From there it’s anyone’s guess when tax payers will get paid, estimates range from 2 to 10 years under “best case” scenarios.

The original $19.4 billion given to GM is highly unlikely to ever be paid back. As for the $30 billion given Monday, that too is likely to never be paid back. The last time GM’s total market capitalization touched $30 billion was in January of 2004 when shares were trading around $55.Since that time GM has not shown an annual profit and has lost more than $82 billion dollars. For taxpayers to see their money, GM’s market cap would have to exceed $50 billion under the current 60% ownership structure. This does not consider the $12.5 billion which was given to GMAC with no strings attached from the TARP. Further, it does not include the $3.5 billion which was also given to GM specific parts suppliers that will not come back. Most importantly however it does not consider the fact that there would be no conceivable way for 60% of public shares to be sold into the open market without diluting shareholder value.

Fiat’s grand plans have been foiled by the Canadian parts manufacturer Magna International, which has joined with Russian bank, Sberbank to make a deal to buy the European operations of GM. Under the terms of the deal GM would retain a 35 per stake in the new company, the Russian government controlled Sberbank would take 35 per cent, Magna would hold 20 per cent and Opel’s employees would control interest in the remaining 10 per cent.

Chrysler’s long-term future, which would have brightened as part of a larger company, has darkened with Fiat’s apparent loss to Magna for GM’s European operations.

For an in depth analysis of this emerging story including its ramifications for the European Union, please read Saturday’s story in the New York Times.

This once proud company, a pillar of American industry, is probably on the verge of declaring bankruptcy. Its new chief executive, Frederick A. Henderson, declared as much on Tuesday, while still hoping that he could restructure the company out of court.

Mr. Henderson, successor to Rick Wagoner, who had to resign at the request of President Obama over the weekend, hopes to recreate General Motors as it once was, an enterprise that can compete and win in the marketplace.

Head to this NY Times article for more…..