GM Is Said to Complete Bankruptcy Asset Sale to a New Company

July 10 (Bloomberg) -- The sale of General Motors Corp.’s best assets to a new company that’s majority-owned by the U.S. government was completed in a signing today in New York, a person familiar with the handover said.

GM will discuss its plans at a Detroit news conference at 9 a.m. The company will review proposed products and management changes, including the retention of Bob Lutz, GM’s former vehicle czar, as a full-time executive, said people familiar with the plans. Lutz, 77, had been set to retire at year’s end.

Shifting assets to the new company allows GM to shed half its U.S. brands, cut more than 6,000 U.S. salaried jobs and idle or close 16 factories. Chief Executive Officer Fritz Henderson has said he will shrink top management by more than a third and speed up decision making.

U.S. Bankruptcy Judge Robert Gerber in New York previously approved the sale of most of GM’s business to a new company backed by the Treasury, which has set a July 10 deadline for the sale. The asset sale was completed this morning in the office of GM’s bankruptcy counsel, Weil Gotshal & Manges.

“We are pleased that General Motors is now free to emerge from bankruptcy and are confident that we can work expeditiously with the company to close the sale on July 10th,” said Meg Reilly, a Treasury spokeswoman.

Steve Harris, a GM spokesman, wouldn’t comment on strategy before the news conference in the company’s hometown. The NYT reported the signing earlier this morning.

Lutz’s New Role

Lutz will have creative oversight of the marketing of GM’s brands, product design and communication of the automaker’s image to consumers, said the people, who asked not to be identified because the plan hasn’t been disclosed.

He will remain a GM employee, not an adviser, and will have other executives reporting to him, the people said. Some details of his role remain to be worked out, they said.

After leading the development of the Volt electric car and revitalizing models such as the Chevrolet Malibu and Cadillac CTS, Lutz announced in February he would leave at year’s end, then said in a June 2 Bloomberg Radio interview he expected to extend his stay beyond December.

Lutz came to GM for a second stint eight years ago to try to revive its design process after spending 12 years each at Ford Motor Co. and the former Chrysler Corp. Lutz, who sometimes flies his own helicopter to work, oversaw Chrysler models such as the 190-mile-per-hour Dodge Viper sports car and the retro- styled PT Cruiser sport-utility vehicle.

Factory, Golf Course

He’ll be part of a new GM that includes its best-performing assets such as its Chevrolet brand and OnStar communication system. The remainder, including contaminated factory sites; a parking lot in Flint, Michigan; and a nine-hole golf course in New Jersey, will stay in Chapter 11.

GM, which entered court protection on June 1 with $176.4 billion in global liabilities, will exit with about $48.4 billion, Judge Gerber said this week.

Among the liabilities are more than $17 billion of debt to the U.S. and Canadian governments, a union-workers health trust and unspecified foreign lenders, GM said June 1. The $48.4 billion includes accounts payable, warranties and pension and other employee obligations, said Julie Gibson, a spokeswoman.

“The new company emerging could only be good,” Mark LaNeve, head of GM’s North American marketing, told reporters yesterday in Washington. “I’m very much looking forward to a point where we’re operating in clear air and the name of the company not being associated with bankruptcy and loans and these things.”

The new GM will leave bankruptcy with four U.S. brands, down from eight. The survivors -- Chevrolet, Cadillac, Buick and GMC -- accounted for 16.5 percent of the domestic market in June, according to industry researcher Autodata Corp. GM aims for an 18.5 percent share.

“We really do want to get focused back on our four divisional brands, Chevy, Cadillac, Buick, GMC, on the great products we have to sell, and really focus on trying to get more customers to try us,” LaNeve said yesterday.

To contact the reporters on this story: John Hughes in Washington jhughes5@bloomberg.net; Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net.