General Motors filed for bankruptcy on June 1, 2009, in a New York federal court, an event that stunned the country and redefined the American auto industry. The Chapter 11 filing made GM the largest industrial bankruptcy in U.S. history at the time. Sixteen years later, in December 2025, the company stands taller than ever. It just delivered $48.6 billion in third-quarter revenue, earned $1.3 billion in profit, and continues gaining ground in electric trucks and SUVs.
Millions of Americans remember the fear that summer. Factories went silent. Dealers closed. Retirement dreams vanished overnight. Few believed the 101-year-old icon could survive. Yet it did—and came back stronger.
How the Trouble Started Long Before 2009
GM once owned half the U.S. car market. Families bought Chevys the way they bought refrigerators—without thinking twice. That dominance hid growing problems.
Labor contracts signed in better decades carried massive costs. Every active worker supported four retirees and their families. Healthcare and pension bills topped $7 billion a year. Foreign competitors paid a fraction of that.
Big SUVs and pickups kept profits high while gas stayed cheap. When fuel jumped past $4 a gallon in 2008, buyers fled to Honda and Toyota. GM showrooms emptied.
Quality slipped too. Customers tired of repairs and recalls. Brand loyalty faded. Market share kept sliding.
The Perfect Storm of 2008
Lehman Brothers collapsed in September 2008. Banks stopped lending to anyone. Car buyers needed loans. GM needed billions just to pay suppliers and workers each month.
Sales fell off a cliff. The industry sold only 10.4 million vehicles in 2009—the lowest total since 1982. GM lost $30.9 billion that year alone. Cash burned at $2 billion a month.
CEO Rick Wagoner flew to Washington in a corporate jet, a PR disaster that made headlines. Congress grilled executives. Lawmakers finally approved emergency loans, but only with strict conditions.
The Final Weeks Before Filing
President Obama’s auto task force took control in early 2009. They demanded a complete overhaul. Bondholders had to swap debt for stock. The UAW had to accept major contract changes. Plants had to close.
Talks dragged on. Deadlines passed. On May 31, GM’s board met in Detroit and made the call: bankruptcy offered the only way out.
June 1, 2009: The Day Everything Changed
At 8:00 a.m. on Monday, June 1, lawyers filed the paperwork in Manhattan. Assets: $82.3 billion. Liabilities: $172.8 billion. The filing instantly ranked fourth on the all-time list of U.S. bankruptcies.
Operations never stopped. Paychecks cleared that Friday. Factories kept building trucks. The government promised warranty coverage so buyers would not panic.
The plan was simple but bold. Sell the best pieces—Chevrolet, Cadillac, most factories—to a new company backed by the U.S. and Canadian governments. Leave the junk behind in the old shell.
The 40-Day Sprint Through Court
Most giant bankruptcies drag on for years. GM wanted out in weeks.
June 2 – Judge approves emergency cash to keep plants open June 19 – Deadline for objections July 5 – Court approves the sale July 10 – New GM begins life free of most old debt
Only 40 days from filing to rebirth. No one had ever seen speed like that.
What Got Left Behind
Fourteen U.S. factories closed forever. Twenty-one thousand hourly jobs vanished. The dealer count dropped from 6,000 to 3,600. Entire towns lost their main employer.
Pontiac died first. Saturn followed. Hummer and Saab were sold off and later shut down. Only Chevrolet, Cadillac, Buick, and GMC made the cut.
The Price Tag for Taxpayers
The U.S. Treasury poured in $49.5 billion. Canada added another $10.4 billion. In return, governments owned 72 percent of the new company.
Many Americans hated the idea of “Government Motors.” Others saw no choice—letting GM fail would have wiped out a million more jobs across fifty states.
The Treasury sold its last shares in 2013. Taxpayers got back $39 billion. The final loss: roughly $10.5 billion—far less than many feared.
Life Inside the New GM
July 10, 2009, marked day one for the reborn company. Debt plunged from $95 billion to $17 billion. Cash flow turned positive almost immediately.
Ed Whitacre took the chairman role and cleaned house. He demanded faster decisions and fewer layers of management. Mary Barra, then a rising executive, led major product overhauls.
The 2010 IPO became the largest in history at the time, raising $23 billion. Shares soared on day one. Confidence returned.
The Road Back to Profits
2011 brought the first full-year profit since 2004. The Chevrolet Cruze sold briskly. Full-size pickups kept margins fat.
The 2014 ignition-switch scandal tested the new culture. Dozens died because of faulty parts. GM paid $900 million in fines and billions in settlements. Barra testified before Congress and vowed change.
She accelerated the shift to electric and autonomous vehicles. The Bolt EV arrived in 2016. Billions flowed into battery plants and software teams.
GM Today: December 2025
Sixteen years after hitting rock bottom, GM employs 97,000 people in the U.S. and sells more than 700,000 vehicles every quarter.
The Silverado EV and GMC Hummer EV sell out months in advance. Cadillac’s Lyriq luxury SUV wins awards. The Ultium battery platform powers everything from compacts to heavy-duty trucks.
Third-quarter 2025 numbers show strength:
- Revenue: $48.6 billion
- Net income: $1.3 billion
- U.S. market share: steady at 16.5 percent
- EV deliveries: up 80 percent year-over-year
Four new battery plants are under construction. Cruise robotaxis operate in San Francisco, Phoenix, and Austin. GM promises thirty electric models by the end of 2025.
Stock trades near all-time highs. Analysts expect another record profit year.
What the 2009 Bankruptcy Taught America
Giants can fall fast when they ignore change. Debt and legacy costs destroy even the strongest brands. Speed matters—GM moved faster in 40 days of bankruptcy than in the previous 40 years of decline.
Workers, unions, and management all sacrificed. Communities rebuilt. A company that once seemed doomed now leads the electric revolution.
From the edge of extinction to the forefront of the future—GM wrote one of the greatest comeback stories in American business. What moment in this journey stands out to you? Let us know in the comments and stay with us for the latest auto news.
FAQ
When did GM file for bankruptcy? June 1, 2009, in U.S. Bankruptcy Court, Southern District of New York.
Why did GM go bankrupt? Years of high costs, falling sales, the 2008 credit freeze, and inability to restructure outside court forced the filing.
How long did GM stay in bankruptcy? Just 40 days—the fastest major industrial reorganization ever.
How much did the bailout cost taxpayers? $60 billion total invested; $39 billion recovered; net loss about $10.5 billion.
What brands did GM keep? Chevrolet, Cadillac, Buick, and GMC survived as core brands.
How is GM doing in 2025? Profitable, growing EV sales, building new U.S. battery plants, and trading near record stock prices.