GM to cut 21,000 US factory jobs,shed Pontiac

General Motors said it will cut 21,000 US factory jobs by next year,phase out its storied Pontiac brand and ask the government to take more than half its stock in exchange for half of GM’s government debt as part of a major restructuring that would leave current shareholders holding just 1 per cent of the company. The struggling automaker said it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of a debt-for-equity swap that aims to retire most of GM’s $27 billion in unsecured debt.

The announcements came in a filing Monday with the Securities and Exchange Commission. GM is living on $15.4 billion in government loans and faces a June 1 deadline to restructure and get more government money. If the restructuring doesn’t satisfy the government,the company could go into bankruptcy protection. GM said it will ask the government to take more than 50 per cent 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 the United Auto Workers stock 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.