Bankrupt General Motors will be replaced by networking giant Cisco Systems in the Dow Jones industrials index while ailing bank Citigroup will make way for insurance giant Travelers Companies, Dow Jones said Monday. The changes are effective June 8. The announcement came just after GM, filed for bankruptcy protection in a New York court, culminating the collapse of the automaker that once symbolized American global industrial might. “The parlous state of GM has left us with no choice but to remove it from the Dow,” said Robert Thomson, managing editor of The Wall Street Journal and editor-in-chief for all of Dow Jones. “A bankruptcy filing immediately disqualifies a stock regardless of a company's history or its role as a cultural icon,” he said. GM's bankruptcy filing is the fourth-largest in US history and the largest for an industrial company. The company said it has $172.81 billion in debt and $82.29 billion in assets. As it reorganizes, the fallen icon of American industrial might will rely on $30 billion of additional financial assistance from the Treasury Department and $9.5 billion from Canada. That's on top of about $20 billion in taxpayer money GM already has received in the form of low-interest loans. GM will follow a similar course taken by smaller rival Chrysler LLC, which filed for bankruptcy protection in April. A judge gave Chrysler approval to sell most of its assets to Italy's Fiat, moving the U.S. automaker closer to a quick exit from court protection, possibly this week. The plan is for the federal government to take a 60 percent ownership stake in the new GM. The Canadian government would take 12.5 percent, with the United Auto Workers getting a 17.5 percent share and unsecured bondholders receiving 10 percent. Existing GM shareholders are expected to be wiped out. The administration expects the new GM could emerge from bankruptcy in as little as 60 to 90 days. President Barack Obama is scheduled to address the nation about GM's future at midday from Washington, and GM CEO Fritz Henderson is to follow him with a news conference in New York. Beyond the bankruptcy announcement Monday, GM is expected to reveal 14 plants it intends to close. One of those plants, however, will be retooled to build a small car. GM's filing comes 32 days after a bankruptcy filing by Chrysler, which also was hobbled by plunging sales of cars and trucks as the worst recession since the Great Depression intensified. The third of the one-time Big Three, Ford Motor Co., has also been stung hard by the sales slump, but it avoided bankruptcy by mortgaging all of its assets in 2006 to borrow roughly $25 billion, giving it a financial cushion GM and Chrysler lacked. – AgenciesFACTBOX • GM says it has $172.81 billion in debt. • Nine more plants to be permanently closed. • Seven powertrain and parts stamping plants to be closed starting in June 2010. • Four core brands – Chevrolet, Cadillac, Buick and GMC – to continue, and four others to be cut. • Some 21,000 employees, about 34 percent of GM work force, to be cut. • The number of dealers to be reduced by 2,600. __
