GM Goes to Fat Camp

General Motors' bankruptcy filing yesterday, and analysis of what can be expected from the storied carmaker from here on out, takes precedence at the top of every front page. The New York Times homes in on President Obama's response, in which he said, The U.S. government is "acting as reluctant shareholders, because that is the only way to help G.M. succeed." Surprisingly, the paper says, the president spoke little of the actual bankruptcy, focusing instead on the company's "second chance." He went on to assert that the filing, on top of other efforts to keep to the company from toppling, "will give this iconic American company a chance to rise again." The Wall Street Journal starts at the beginning of the end, writing that the company's decline was "marked by denial." It opens with then-Chief Executive Rick Wagoner telling a Dallas crowd that GM (GM) may have to sell Hummer but no way no how was it going to file for bankruptcy. That was July 10, 2008.

The company filed first-day motions in New York Federal Bankruptcy Court Monday so that it would be able to continue to pay employees and suppliers while it is in court. GM will receive an addition $30 billion in government aid, bringing the total to about $50 billion. The governments of Canada and Ontario have agreed to shell out $9.5 billion. When GM comes out after what is expected to be a rapid bankruptcy process, it will be "with its best assets, including its Chevrolet, Cadillac, Buick and GMC brands, and with 60 percent government ownership," the Times writes. The rest of its equity will be split among a United Auto Workers union health care trust, bondholders, and the Canadian governments. Shortly after filing, the company announced it would close 14 more factories, half of which will be in its home state of Michigan, and will cut up to 21,000 more jobs.

The Washington Post provides an interactive photo gallery to complement its coverage that begins with a black-and-white of William C "Billy" Durrant, founder of GM, in a Model F Buick during the 1906 Glidden Tour and ends with an American-flag-heavy shot of GM World in Detroit. The WSJ also does an interactive time line, taking the viewer through the company's rise and eventual fall. "In the end," the paper says, "GM was a victim of its own success—its path to bankruptcy paved with the very management, marketing and labor practices that made it the world's largest and most profitable company for much of the 20th century."

As a result of government intervention, GM and Citigroup were kicked out of the "closely watched" Dow Jones Industrial Average yesterday, according to Reuters. Taking their places are Cisco Systems Inc. (CSCO.O), the fifth technology company included in the Dow, and Travelers Co. (TRV.N), a home, auto, and commercial insurer. The removal of GM "ended its 83-year run in the blue-chip industrial average, which has just 30 components," the site says. The only other stock with a longer history is General Electric (GE), which was in the original Dow in 1896." GM has also been removed from the S&P 500, bumping up the weighting of Chevron (CVX.N) and Exxon Mobil (XOM.N) to 5.9 percent and 6.2 percent, respectively.

Bloomberg takes a look at JPMorgan (JPM) and American Express (AXP), which have said they will raise money through a stock offering. The Federal Reserve recently implemented a rule requiring any company looking to pay back TARP money to first tap equity markets, and even though regulators said neither company was required to raise funds as a result of the stress tests, JPMorgan will issue $5 billion of stock and Amex, $500 million. "J.P. Morgan said the amount was set by regulators as a way to show equity markets were open to them," Bloomberg reports. The company and Chief Executive Jamie Dimon have been vocal about their distaste for the increased scrutiny that has come as a result of the billions it has received in Federal aid, calling the TARP infusion a "scarlet letter." Speaking at a conference yesterday, Dimon read out loud a mock letter to Treasury Secretary Timothy Geithner that started: "Dear Timmy, we are happy to be able to pay back the $25 billion you lent us. We hope you enjoyed the experience as much as we did."  Dimon intended to repay the funds at the end of the month.

CNNMoney has its finger on the stock markets, reporting that a rally Monday sent the Dow Jones Industrial Average to "near the breakeven point for the year," citing as the cause "better-than-expected readings on manufacturing activity" that has "raised hopes that a global economic recovery is brewing." The Dow Jones Industrial Average (INDU) climbed 221 points, or 2.6 percent, closing at 8,721.44. The blue-chip average, the site says, is within 55 points of breaking even for the year. The broader S&P 500 (SPX) rose 24 points, or 2.6 percent, to about 943 points, its peak for the year so far. The Nasdaq composite (COMP) went up 54 points. "The rally was broad based, with industrial and technology stocks leading the pack," the site reports. Boeing (BA) rose 6.5 percent and United Technologies Corp. (UTC) gained 5.3 percent. And "as stocks advanced, demand for safe-haven assets evaporated." The yield on the benchmark 10-year note rose to 3.7 percent, with its price falling sharply.