With good assets sold, 'New GM' exits bankruptcy

By Kevin Krolicki and David Bailey

DETROIT (Reuters) - A new General Motors emerged from bankruptcy protection on Friday -- far more quickly than most industry-watchers had expected -- as a leaner automaker pledging to win back American consumers and pay back taxpayers.

A whirlwind 40-day bankruptcy for GM concluded with the closing of a deal that sold key operations to a new company that is majority-owned by the U.S. Treasury.

The closing documents were signed early Friday by representatives of the government and GM executives at the law firm of Weil, Gotshal & Manges, GM's bankruptcy counsel.

The development, which follows a similar fast-track reorganization of Chrysler, represented a victory for the Obama administration and its commitment to save jobs and prevent a liquidation of the largest U.S. automaker.

At the same time, the U.S. government has taken on substantial new risks as a 60 percent owner of the new GM with a $50 billion equity investment and $10 billion in debt and perpetual preferred shares.

Analysts said the government intervention had given GM a new chance and sharply lower operating costs but left management facing deep challenges given the weak economy and GM's long-running slide in market share.

"I wouldn't really call it a new GM, it is just a smaller GM. That would be more of an apt description. They still have a lot of hurdles to jump," said Mirko Mikelic, portfolio manager at Fifth Third Bank. "Right now, they are in a survival mode."

Chief Executive Fritz Henderson said the new company would shed layers of management, make decisions faster and shed the bureaucracy that critics say contributed to the failure of the 100-year-old automaker.