DETROIT — General Motors could be majority owned by the federal government under a massive restructuring plan laid out Monday that will cut 21,000 U.S. factory jobs by next year.
The plan, which includes an offer to swap roughly $27 billion in bond debt for GM stock, would leave current shareholders holding just 1 percent of the century-old company, which is fighting for its life in the worst auto-sales climate in 27 years.
GM is living on $15.4 billion in government loans and said Monday in a filing with the Securities and Exchange Commission that it envisions receiving an additional $11.6 billion.
But if GM’s restructuring plan — which includes phasing out its 83-year-old Pontiac brand — can’t satisfy the government by June 1, the struggling company could go into bankruptcy protection.
GM said that it will ask the government to take more than 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1. The swap would cancel about $10 billion in government debt.
In addition, GM is offering stock to the United Auto Workers for at least 50 percent of the $20 billion the company must pay into a union-run trust that will take over retiree health care expenses starting next year.
If the plan is successful, the government and UAW health care trust would own 89 percent of GM stock, with the government holding more than a 50 percent stake, chief executive Fritz Henderson said in a news conference at GM’s Detroit headquarters.
Analysts are predicting that GM’s effort to exchange $27 billion of its unsecured bond debt for equity is likely to fail because it doesn’t provide a big enough stake in the company.
GM began its bond exchange Monday, asking bondholders to take 225 shares of common stock for every $1,000 in debt.
In a filing with the Securities Exchange Commission, GM said it needs to exchange 90 percent of its unsecured notes — about $24 billion — by a May 26 deadline. It also states that GM will file for bankruptcy if not enough bondholders agree to change their notes.
The Obama administration said in a statement that the bond-exchange filing is an important step in GM’s restructuring but that it has not made a final decision about taking stock for part of its loans.
The company also said it plans to reduce its dealership ranks by 42 percent from 2008 to 2010, cutting them from 6,246 to 3,605.
