It's official: GM files for bankruptcy protection

— -- The filing, at the U.S. Bankruptcy Court in New York's Southern District, is the largest in U.S. manufacturing bankruptcy. It is tantamount to a massive reorganization designed to keep the American institution running. The carmaker's good and bad assets would be separated under what the Obama administration hopes will be a speedy Chapter 11 reorganization.

GM says it is still open for business and had no significant disruptions in its supply base before or after the bankruptcy filing.

GM CEO Fritz Henderson said the new GM will be a leaner and quicker company that's more focused on its customers and its products.

Obama said he hopes the firm would emerge quickly from bankruptcy court, and said the government is ready to commit an additional $30 billion to help the company get on its feet.

The move is part of a risky gambit by the White House to shrink the American icon — once considered a symbol of economic might and dynamism — to a sustainable size and give a majority ownership stake to the federal government.

A likely result would be to scale down the size of GM and sell it off in pieces, says Marcus Cole, a financial law professor at Stanford Law School.

Officials involved in bankruptcy planning said the White House was a "reluctant investor" but had to prevent a liquidation that analysts say would have cost tens of thousands of jobs during the worse economic slowdown in more than 75 years. GM employs 92,000 in the USA, and is indirectly responsible for 500,000 retirees.

The high-stakes plan got some encouraging news Sunday night, when a bankruptcy judge gave Chrysler approval to sell most of its assets to a group led by Italy's Fiat, moving Chrysler closer to its goal of a quick exit from court protection.