Some of the larger terminated contracts include ad deals with the Oakland Raiders, the University of Southern California and the Arnold Palmer Invitational golf tournament. GM even terminated its contract for a Chevrolet clock in Times Square – a deal which dates back seven decades.

The contract terminations come as no surprise, though, as GM has been trimming its ad dollars for several months. GM has already stopped advertising during the Super Bowl and the Academy Awards and cut ties with golfer Tiger Woods late last year.

Wagoner, a 32-year veteran of GM, had a pension with total retirement benefits of about $20 million, according to a March regulatory filing. In all, Wagoner will take a more than 60 percent cut to the current value of his retirement benefits.

That’s consistent with cuts made to other retired executives. GM pension recipients who receive a total yearly payment of $100,000 or less will lose 10 percent of their payout. But former executives who collect a higher pension are seeing pension payouts reduced by two-thirds.

Under an arrangement reached between Wagoner and the old GM, he will receive $1.63 million annually for five years and $74,030 a year for the rest of his life.

Wagoner, who was fired by Obama as part of the automaker’s restructuring, remains on the payroll at $1 a year and will officially retire Aug. 1.

He also will receive personal umbrella liability insurance coverage until Jan. 1 — consistent with what other retired executives are receiving. Wagoner, who became CEO in 2000 and added the title of chairman of the board in 2003, also will get an existing life insurance policy or its cash value of $2.57 million.

The retirement agreement was assigned to the new GM in conjunction with an asset sale approved last week by a U.S. bankruptcy judge.

Wagoner’s total compensation since 2003 has been about $65 million, including $40.2 million over the past three years.

But amid a steep drop in the company’s stock price, the stock and options the automaker awarded to Wagoner declined dramatically. He was awarded $11.9 million in stock and options in recent years, but the actual value as of Dec. 31 was $682,000.

GM shares plunged even further in the months before the automaker filed for Chapter 11 bankruptcy June 1.

General Motors Co. emerged from federal bankruptcy court on July 10 after a rapid restructuring and $50 billion in federal aid.

GM also disclosed the identities of additional members of the old GM’s board of directors.

The old GM — now known as Motors Liquidation Co. — is headed by President and CEO Al Koch, who is vice chairman and managing director of restructuring firm AlixPartners. Koch is handling the sale and liquidation of the old company’s assets, such as the Pontiac, Hummer, Saab and Saturn brands.

On the board, he is joined by James Selzer, who is vice president and treasurer of the old GM. Selzer also is a director in the corporate turnaround and restructuring practice of AlixPartners.

Koch and Selzer will be paid $835 an hour and $555 an hour, respectively, filings show.

Their affiliated firm, APServices LLC, is entitled to a $13 million “success fee” since U.S. Bankruptcy Judge Robert Gerber approved the GM asset sale. The company also may be paid an undetermined fee by old GM, according to the regulatory filing. The financial terms are being discussed and are subject to approval by the bankruptcy court.

This month the old GM elected five new directors who will serve on the company’s board. They are: Stephen Case, who founded AOL but is no longer associated with the company; former Chrysler Group President James Holden; and Alan Johnson, Alan M. Jacobs and Wendell Adair.

The directors will be paid a $50,000 annual retainer, plus $3,000 per meeting.

The old GM will file periodic reports with the SEC outlining liquidation payments, expense amounts and other data.

Harvey Miller, GM’s bankruptcy lawyer, told Bloomberg Television on Tuesday that he expects the Obama administration’s auto task force to be disbanded in the next six weeks. “I really believe that by the end of August, the task force will be gone,” he said.

But administration officials have said the auto task force could be in business for several months.

He will be succeeded by Ron Bloom, a former adviser to the United Steelworkers union who worked with the White House auto task force alongside Rattner counseling U.S. Treasury Secretary Timothy Geithner.

“Ron Bloom will assume leadership of the task force’s activities as the government transitions its role away from day-to-day restructuring to monitoring this vital industry and protecting the substantial investment the American taxpayers have made in GM, Chrysler and GMAC,” Geithner said in a statement.

“We are extremely grateful to Steve for his efforts in helping to strengthen GM and Chrysler, recapitalize GMAC and support the American auto industry. I hope that he takes another opportunity to bring his unique skills to government service in the future.”

Sen. Carl Levin, D-Detroit, said Rattner “has done a very good job, and he made a significant contribution to a brighter future for the auto industry.”

Rattner played a key role in helping to achieve what the administration termed “quick-rinse” bankruptcies. Both automakers sold their best assets to new entities that emerged from bankruptcy much faster than most industry and legal experts expected.

“Rattner’s job was kind of to twist arms and get this thing through bankruptcy,” said Stephen Spivey, a senior San Antonio-based auto analyst with consulting firm Frost & Sullivan.

On March 27, when former GM Chairman and CEO Rick Wagoner was in Washington, Rattner took him aside and told him the president and Treasury Department wanted him to step down. GM President Fritz Henderson was installed as the new CEO.

The Treasury Department, which holds a 60.8 percent stake in the new General Motors Co., appointed former AT&T Inc. Chairman and CEO Edward Whitacre Jr. chairman of the GM board overseeing management.

At a news conference Friday, Henderson said management expected to deal less frequently now with the task force.

On Monday, Henderson said Rattner’s “expertise was a key contributor toward a new GM emerging in record time. His leadership of the auto task force helped support our making the difficult commercial decisions that are necessary to re-invent GM.”

The U.S. government has extended more than $80 billion in emergency loans to GM, Chrysler and their financing arms and has exchanged more than half of that debt for stock and warrants in the companies. It also established a revolving $5 billion loan program to help suppliers.

Rattner did not respond to an e-mail seeking comment. Bloom declined to discuss the change.

Some officials speculated that Rattner was in line for a big job in the Treasury Department. But his chances of confirmation dimmed when he was linked to a Securities and Exchange Commission investigation into payments made to an investment firm caught up in a kickback scheme involving New York pension funds. Rattner wasn’t accused of any wrongdoing.

Calling Rattner’s vision and leadership “invaluable to the task force’s efforts,” Geithner said there was still much to do to ensure GM and Chrysler come out of this process as stronger and more competitive companies.

“President Obama has made it perfectly clear that it is the responsibility of their private boards of directors and management teams to deliver that result,” he said.

“This is a new General Motors, which is going to be focused on fewer brands, fewer entries — every new product is going to hit the right spot in the market and delight our customer,” GM North America President Troy Clarke told The Detroit News on Thursday, likening the bankruptcy to “a near-death experience.”

GM, the largest industrial company to ever file for Chapter 11 bankruptcy and the fourth-largest overall, defied skeptics with a faster-than-expected stay in court protection that wiped out billions in debt. Backed by $50 billion in federal loans, GM now becomes one of the world’s largest government-owned companies and will spend years under the watchful eye of the White House.

GM CEO Fritz Henderson is expected to join the company’s new chairman, former AT&T Chairman Ed Whitacre, at a press conference in Detroit this morning to launch the new GM and announce structural and leadership changes. But most corporate changes will be revealed later this month, after the rest of the board of directors is named.

The News learned Thursday that GM product czar and Vice Chairman Bob Lutz, won’t retire at the end of the year as previously announced, but will continue in a new role.

The automaker won’t replace its globally recognized corporate logo, or name new board members today. But it will emphasize that it has turned the page.

“This milestone is really the beginning of something big as opposed to the end of something,” Clarke said.

“We’ll ask for people to please give us that one look. Give us that one consideration and we won’t disappoint you.”

Sean McAlinden, vice president of the Center for Automotive Research in Ann Arbor, expects today’s press conference to be “a pretty good commercial about the new GM Co. — their commitment to consumers, their trustworthiness, and everything they’ve accomplished, how they’ve achieved their targets so far.”

By any estimate, GM’s trip through bankruptcy was amazingly quick.

“I had no idea it could go this fast,” said McAlinden. “It has been perfect. Just like a no-hitter baseball game.”

Still, not all of GM’s struggles are behind it.

A majority of U.S. House members have signed onto a bill to reverse the closing of 789 Chrysler Group LLC dealerships and block GM from closing more than 1,300. The full House could vote on the bill as early as next week. Chrysler emerged from bankruptcy last month.

The Automobile Dealer Economic Rights Restoration Act of 2009, sponsored by Rep. Daniel Maffei, D-N.Y., now has 221 cosponsors — enough for passage in the 435-member House. A Senate version sponsored by Charles Grassley, R-Iowa, has 14 co-sponsors, including Edward Kennedy, D-Mass.; Tom Harkin, D-Iowa; and Robert Bennett, R-Utah.

GM’s vice president for sales, service and marketing, Mark LaNeve, and Clarke met with more than 20 members of Congress over the past two days. LaNeve said GM, in the second quarter of 2010, will take another look at its closing dealers to reconsider some if the market or GM’s sales improve.

“This has been the most difficult, hard thing I’d ever have to do,” LaNeve said. “In terms of creating a viable, competitive GM on taxpayer dollars, you can’t look in the mirror and say we didn’t have to restructure the dealer body.”

GM also faces more pain as it continues to shrink. It must close another 10 plants by the end of 2010 — including four in Michigan — and will trim another 4,000 salaried workers by Oct 1. It will prune its top executive ranks by 35 percent.

U.S. Bankruptcy Judge Robert Gerber noted that GM employs 225,000 worldwide — including 91,000 in the United States — and supports an estimated 500,000 retirees and dependents. It has nearly 6,000 dealers and 11,500 suppliers. GM’s active workforce is expected to shrink to fewer than 70,000 by the end of 2009.

“If GM were to have to liquidate, the injury to the public would be staggering,” Gerber said this week in declining to expedite an appeal of his ruling approving GM’s asset sale. “This case likewise raises the specter of systemic failure throughout the North American auto industry, and grievous damage to all of the communities in which GM operates.”

GM’s quick trip through bankruptcy closed eight tumultuous months that began Nov. 8, when GM disclosed it had burned through nearly $7 billion in cash in the third quarter and warned it would collapse in early 2009 without a government bailout.

Its sales plunged amid a weak economy and GM lost its title last year as the world’s largest automaker by sales when it was overtaken by Toyota Motor Corp.

President George W. Bush rescued GM and Chrysler with $17.4 billion in loans in the waning days of his administration, giving them until March 31 to win dramatic concessions from unions and bondholders.

His successor, President Barack Obama, fired GM Chairman and CEO Rick Wagoner, rejected GM’s restructuring plan and ordered deeper cuts. The White House also told Chrysler to tie up with Fiat SpA or face liquidation.

Obama’s auto task force pushed GM and Chrysler into bankruptcy but with the promise of billions in new aid, believing a court-overseen process was the best way to wipe clean the two companies’ overextended balanced sheets and win needed concessions.

While today marks the end of GM as a public company, the new GM will have far less debt, four fewer brands and a much smaller footprint. It will shrink some of its overseas operations.

In its bankruptcy filing, the Detroit-based automaker, which has lost $88 billion since 2005, listed $82.3 billion in assets and $172.8 billion in debts.

The post-bankruptcy GM has an enterprise value of between $63 billion and $73 billion, as well as debts of about $17 billion — with about half of that held by the government.

GM will get another $20 billion in government aid by Dec. 31, bringing the federal government’s total investment to $50 billion. In total, the Treasury Department will have by year’s end committed about $100 billion to the troubled auto industry.

Taxpayers are likely to lose billions of dollars on auto investments — including the first $20 billion in aid GM received.

The Treasury Department will hold a 60.8 percent stake in the new GM and the Canadian government will hold 11.7 percent.

A UAW health care trust fund will own 17.5 percent; unsecured creditors will receive a 10 percent stake and warrants equal to 15 percent of the stock.

Although the White House vows not to “micromanage” GM, and claims it wants to sell its stake as soon as possible, that will likely take years.

A group of five individual accident victims and asbestos claims litigants filled motions late Monday asking Gerber to certify their appeal for immediate hearing by the U.S. Court of Appeals in New York.

Gerber, in a 95-page opinion issued late Sunday, approved the sale of GM’s good assets to a group backed by the Treasury Department, saying the deal will “prevent the death of the patient on the operating table.”

In the Chrysler bankruptcy, U.S. Bankruptcy Judge Arthur Gonzalez certified the appeal of secured creditors, who have more legal rights than GM’s objecting unsecured creditors. The appeals court agreed to hear the Chrysler case and ruled just 17 minutes after hearing oral arguments, rejecting efforts to block the sale of the Auburn Hills automaker’s assets to a group led by Fiat SpA.

The creditors wanted to leapfrog the U.S. District Court so they could get a quick hearing.

Tuesday afternoon, GM and the U.S. Attorney’s Office objected to the groups’ request.

GM had urged the judge to reject attempts to certify an appeal by the accident victims and asbestos claims litigants, arguing similar issues already were addressed in the Chrysler case.

“In light of its recent decision in Chrysler, it is likely that the Second Circuit will likewise question the need for such extraordinary relief, i.e., to revisit issues it has just addressed,” GM lawyer Harvey Miller wrote in a court filing.

In the Chrysler case, the 2nd Circuit Court of Appeals concluded such asset sales can be consummated free and clear of tort liability, the U.S. Attorney’s Office wrote in a court filing Tuesday.

“Any stay pending appeal must be conditioned upon a substantial … bond to protect new GM and the debtors’ stakeholders from the potentially disastrous consequences if the sale does not close promptly,” Assistant U.S. Attorney Matthew Schwartz wrote.

If the sale survives appeals, GM will be able to leave behind many product liability claims in bankruptcy.

Gerber gave opponents until noon on Thursday to win a court delay of his ruling that the asset sale can go ahead. GM and the Treasury Department, which will own 60.8 percent of GM, could close on the deal late Thursday.

GM and the administration’s auto task force have been negotiating with more than a dozen state attorneys general who have objected to the company’s plan to sell its desirable assets to a new, government-financed entity. A hearing to approve the plan is scheduled Tuesday in federal bankruptcy court in Manhattan.

The chief concern for GM and the government is whether customers who have claims about existing products but have not yet filed lawsuits can sue the company in state courts. Because bankruptcy case law is murky on the matter, GM and the auto task force chose to assume the liability instead of risking a delay of the company’s emergence from bankruptcy.

The negotiations were initially reported by The Wall Street Journal and The Washington Post.

Other legal responsibility, including previously filed product liability claims and the closures of GM dealers, are likely to remain tied to the GM entity that will be left behind in the bankruptcy.

Courts typically allow companies under bankruptcy protection to leave claims behind in bankruptcy and emerge with a clean slate, a precedent GM and the government are relying upon.

Chrysler, for example, which completed its own government-backed restructuring this month, left both product liability claims and unwanted dealers with its old estate, now known as Old CarCo. Claims left behind in bankruptcy generally have only a slim chance of being paid.

“While the sacrifices being made in this process — by workers, retirees, creditors, dealers, suppliers, communities and individuals injured by GM products — are painful, there is nothing exceptional about these bankruptcy terms,” said an administration official, who requested anonymity amid ongoing talks.

But GM raises questions because of its much larger size. Last year, GM set aside more than $900 million for product liability litigation.

An ad hoc committee of consumer complainants, which says it represents $1.25 billion in personal injury claims, has objected to GM’s plan.

Auto dealers, too, have complained that GM and the administration are improperly trying to use the federal bankruptcy code to overrule state laws meant to protect car dealerships.

The whole deal — an acquisition without cash, control with a minority stake, and the fact that it was brokered by government — is unusual, said Mike Boudreau, a director with Bloomfield Hills turnaround firm O’Keefe & Associates. “But it was necessary to protect the industry.”

It is a sign of just how desperate Chrysler’s plight was that Fiat was able to swoop in with an empty wallet after a two-year search failed to find a global partner.

Without a financial suitor to replace Cerberus Capital Management LP, Chrysler would have collapsed in the wake of the biggest industry sales downturn in 40 years.

The Obama administration defends the terms as the best option on the bargaining table.

“Fiat is going to be in a strong position to help with the restructuring of Chrysler in ways that will be mutually advantageous, and so we think it’s a desirable structure,” said Larry Summers, President Barack Obama’s chief economic adviser and co-chairman of the administration’s auto task force. “At the same time, we’re glad that there are a range of other stakeholders with ownership interests in the company.”

With credit markets frozen and the auto industry on the verge of collapse, posing a threat to the broader economy, turnaround experts say the noncash deal was the only viable option.
‘It does make sense’

“In this situation, it does make sense,” said Van Conway, president of Conway MacKenzie Inc., a Birmingham management and restructuring firm.

Today, offering stock and options to lure new management with little investment is common in business. And in the private sector, the amount of money invested and shares held is not always proportional to management control.

The majority stakeholder in the new Chrysler Group is the voluntary employees’ beneficiary association, a health care retiree trust run by the United Auto Workers.

The union from the outset said it did not want to be the majority shareholder — it was essentially forced to accept equity in the VEBA in lieu of a cash contribution the bankrupt automaker could not afford — and the union hopes to sell its shares as soon as possible. The union also has said it does not want to run General Motors Corp., where a similar VEBA will hold 17.5 percent of the automaker when it emerges from bankruptcy.

Chrysler Group LLC was created by combining certain assets of bankrupt Chrysler with Fiat, and the new company’s ownership breaks down this way: the U.S. Treasury with 9.85 percent, Canadian and Ontario governments with 2.46 percent, the UAW’s VEBA with 67.69 percent and Fiat with 20 percent.

Experts say it makes strategic sense for Chrysler to lean on Fiat at this time. “Fiat is the only shareholder that has automotive operating experience,” Conway said. “Not only will they (Fiat) run it, they will add to it.”

The Fiat deal is designed to allow the Italian automaker’s stake to grow to 35 percent over the next two years if it meets certain conditions, such as building small engines and vehicles for Chrysler in the United States, and distributes Chrysler products abroad.

The original tie-up agreement called for Fiat to have a 35 percent stake from the beginning, but the task force dictated the new terms that now have Fiat’s stake gradually increasing in 5 percent increments as it meets each condition.

Increasing Fiat’s stake will reduce the governments’ slice to 10 percent (8 percent for the U.S., 2 percent for Canada) and the VEBA will retain 55 percent.

The breakdown of Chrysler’s nine-member board also does not fall in line with the equity. Fiat initially gets three appointments, including CEO Sergio Marchionne — who doubles as chief executive at Chrysler — the Treasury department appoints four, and Canada and the VEBA appoint one each. Once Fiat reaches 35 percent equity, it can appoint a fourth board member, and a Treasury appointee would step down.
Stake can increase

Upon repayment of $6.6 billion in government loans keeping Chrysler afloat, Fiat can increase its stake to 51 percent between Jan. 1, 2013, and June 30, 2016.

The governance structure appeals to all parties.

For Fiat, the alliance dovetails with its global expansion goals but a lack of cash to execute it.

Fiat values the technology and engineering it is sharing with Chrysler at $3 billion, said Alfredo Altavilla, head of business development. Chrysler will have access to small car, small engine and diesel technology — all Fiat specialties. For Chrysler to duplicate the efforts from scratch would cost $8 billion to $10 billion, former Chrysler Vice Chairman Tom LaSorda said.

Chrysler also values the management services Fiat will provide, said spokeswoman Lori McTavish, noting Fiat was in the same financial straits five years ago that Chrysler is in now.

Marchionne is restructuring Chrysler along brand lines, similar to how Fiat is organized. But of the 23 people on Marchionne’s Chrysler management team, only three are from Fiat. But the deal is not risk-free for Fiat, which has rebounded from steep financial losses in the late 1990s and early 2000s. With Chrysler under its belt, its liquidity, management and CEO will be strained.

For these reasons, Standard & Poor’s Ratings Services said it is keeping Fiat on CreditWatch.

On a more positive note, “the new entity’s structure is designed to be leaner, and the debt burden has been reduced,” said credit analyst Barbara Castellano.

In a consolation that offers little hope for now, the U.S. auto task force said it will step in if the supply chain unravels and vehicle assembly plants are forced to close due to parts shortages, said Neil De Koker, president of the Original Equipment Suppliers Association, which requested the aid.

The setback came as more cash-strapped auto parts makers show signs of collapsing amid a sharp decline in North America car and truck output.

Novi-based Cooper-Standard Automotive missed a key interest payment this week, and bankrupt Metaldyne Corp. said Tuesday it would seek court approval to sell much of its business to a private equity firm.

Also Tuesday, American Axle & Manufacturing Inc., a key GM supplier, sought a court order to force a steel supplier to resume deliveries to keep the whole supply chain from breaking.

About 20 suppliers have already filed for bankruptcy this year and the number is expected to increase over the next 30 days.

Major Metro Detroit companies are succumbing, with Visteon Corp. in Chapter 11, and Lear Corp. and Cooper-Standard in danger of filing.

Auto suppliers are being battered on multiple fronts: tight credit markets, a slump in light vehicle production and rising commodity prices.

The auto task force met twice last week with two trade associations for suppliers, who sought another $10 billion in aid.

De Koker, who met with the task force, was told the government’s role was not to prevent bankruptcy, but to let market forces play out and to provide financing as needed to avoid plant closures from parts shortages.

“I’m disappointed,” De Koker said, “but the door is not closed.”

“If things get disorderly and assembly lines shut down due to lack of parts, (the task force) would be open to get into it again,” he said.

Steven Rattner, the top adviser to the auto task force, told The Detroit News on Monday that the government’s priority is the stabilization of General Motors Corp. and Chrysler Group LLC and ensuring they had an adequate supply of parts.

Lawrence Summers, chief White House economic adviser and co-chairman of the task force, said the government can’t save all auto suppliers.

“We’re monitoring the situation closely, and we certainly would be very focused on making sure that a situation where problems in the supply chain prevented the production of automobiles … do not develop,” Summers told The News. “It can’t be the objective of government policy to assure the health of all individual companies.”

The test could come in the next 30 days as suppliers struggle for financing to ramp up production to supply Chrysler, which could restart many vehicle assembly plants at the end of the month. Chrysler stopped making vehicles April 30 when it filed for bankruptcy, which means its suppliers are receiving payment for April shipments now, but will be without payments for July or August.

GM has rolling plant shutdowns this summer that also will play havoc with suppliers and drastically cut their volumes for the year. All automakers have cut output in the face of dismal auto sales.

OESA initially sought aid for suppliers on Feb. 13, and the government responded on March 19 by making $5 billion available to guarantee receivables for suppliers to bankrupt Chrysler and GM. The program also allowed for speedier payment from the traditional 45 days. Without the guarantees, suppliers would have been deemed unsecured creditors and likely recover about 20 cents on the dollar for their parts.

The program is managed by GM and Chrysler, and applies only to their major U.S. suppliers.

Only about 50 companies sought the aid through Chrysler before the automaker stopped participating when it filed for bankruptcy and was able to pay suppliers directly.

GM, which filed for bankruptcy a month after Chrysler, had about 320 companies use the program, said supplier analyst Jim Gillette of CMS Worldwide in Grand Rapids.

Many suppliers have not been eligible; others, like ArvinMeritor Inc., chose not to take the aid. ArvinMeritor Chairman Chip McClure said there was no need to use government aid as both automakers made their payments in full and on time.

Metaldyne Chairman Thomas Amato said if the supplier had been able to get government loans directly, rather than through the automakers, it would have been easier to prepare for bankruptcy or perhaps avoid filing altogether.

Metaldyne said Tuesday it has signed an agreement to sell some powertrain component plants to Belgian-based RHJ International. The sale still must be approved by the court. The business units involved include two of Metaldyne’s four Michigan plants — in Warren and Litchfield.

De Koker said surveys show half of the industry’s suppliers are distressed.

Among those on the bubble: Cooper-Standard has 30 days to make the interest payment it missed Monday. Standard & Poor’s Rating Services said Tuesday the company could default and file Chapter 11.

Those who have already filed for bankruptcy have been able to get able to get financing to keep operating under court protection from a customer or lender, De Koker said.

Chrysler said Tuesday it would allow its closing dealers until June 15 to transfer their unsold inventory to other dealers. “The company is trying to be compassionate toward its dealers,” said Kevyn Orr, a lawyer for Chrysler.

Stephen Lerner, a lawyer for the dealers, told Gonzalez that Chrysler was acting in an “unconscionable” fashion and that the process had been “less than fair to dealers.”

Chrysler “could have provided a softer landing to its dealers,” Lerner said.

But Orr noted that the company has the right to terminate contracts in bankruptcy. “We’re not here to negotiate,” he said.

He said dealers who don’t take advantage of the offer to transfer vehicles were acting “irrationally.”

But closing dealers may be stuck with unsold parts and tools. After Tuesday, they will not be able to sell new Chrysler vehicles with warranties or be eligible for Chrysler sales incentives — moves that would make it effectively impossible to sell most vehicles.

General Motors Corp., which is seeking to shutter at least 2,400 dealers, has taken a much different tack with its dealers.

GM is offering an appeal process for closing dealers and has reversed itself in at least 11 cases. GM is offering cash payments of up to $1 million for closing dealers and giving them 18 months to wind down and sell off their inventory.

“Employees’ families are destroyed,” Lerner said of Chrysler’s closing decisions. “It did not have to be this way.”

Orr said the closing dealers have just 2 percent of the initial 44,000 units of inventory they held when Chrysler announced their closings on May 14 — and that 98 percent of the inventory has been reallocated on terms.

Chrysler has “implemented a reallocation program under which qualified new Chrysler, Dodge and Jeep vehicles held by consenting (closing) dealers will be purchased from these dealers by remaining authorized dealers on terms and conditions substantially similar to the repurchase of vehicles that otherwise would occur under certain,” the company said. Judge Gonzalez cited the program in approving the request to close the dealerships.

A series of lawyers representing the more than 300 Chrysler dealers objecting to the closing are addressing the court. One, Russell P. McRory, compared Chrysler to the Wizard of Oz, saying they were trying to convince the court to “pay no attention to the man behind the curtain.”

Lerner also asked Gonzalez to at least delay approving the closing of dealers until the Supreme Court decides whether to approve the sale of the bulk of Chrysler’s assets. Another lawyer said the dealers should be able to stay open until Chrysler’s tie-up with Fiat SpA closes.

A lawyer for the Illinois Secretary of State’s office said that under state law closing dealers get 60 days to wind down. If the court follows the state law, those dealers would still have about 30 days left to sell off inventory. Other states, including New York, allow closing dealers after 90 days.

On Monday, Justice Ruth Bader Ginsburg delayed Chrysler’s exit from bankruptcy, extending a stay issued Friday by the federal appeals court in New York, which had upheld Gonzalez’ May 31 approval of the sale of Chrysler’s assets. The company’s “bad assets” will be sold off over the next year or so in bankruptcy. The Supreme Court had taken no action as of mid-afternoon Tuesday.

Chrysler has said the dealers closing are underperforming — and account for just 14 percent of its annual retail sales.

A House Energy and Commerce subcommittee is set to consider the issue of the closing GM and Chrysler dealers on Friday, with GM CEO Fritz Henderson and Chrysler president James Press scheduled to testify, along with John McEleney, head of the National Automobile Dealers Association. The Senate Commerce Committee held its own hearing on Wednesday on closing dealerships — with the three same witnesses, among others.

“GM’s future now seems assured,” said Rep. Sander Levin, D-Royal Oak. “But it’s coming at a real price for families and communities.”

Michigan is likely to be among the hardest hit, given the company’s concentration in the state. Sen. Carl Levin, D-Detroit, was given the list of affected plants in Michigan late Sunday night, his office confirmed. But officials were waiting to announce the list until workers could be informed Monday morning.

Lawmakers elsewhere are worried as well. Sen. Lamar Alexander, R-Tenn., said he was “doing everything I can” to save the Spring Hill, Tenn., plant that is home to GM’s Saturn unit. Sen. Tom Carper, D-Del., warned that closing the assembly plant in his state would further reduce the company’s already shrinking political clout outside the industrial Midwest.

“It’s a very sad day obviously for Michigan and for the country,” said Rep. Thad McCotter, R-Livonia.

McCotter criticized the Obama administration’s auto task force for pledging early in its existence to try to keep both companies out of bankruptcy court.

“What we ended up with was prepackaged bankruptcy for both GM and Chrysler,” he said. “To hold out hope (that bankruptcy could be avoided), what they should have done was just told us that’s what it was.”

Despite the worry, Michigan lawmakers said the news could have been worse. With an additional $30 billion in federal aid, the company will emerge from bankruptcy better able to compete, and negotiations with the United Auto Workers union lessened the impact of production cuts in the United States, they said.

Sen. Levin pointed to a GM pledge to increase the share of its total auto production located in the United States to 70 percent, and the promise to build a new, small car at one of three assembly plants the company will idle.

“That’s a major change” from the company’s original plans, he said.

“There was some major discussions” on that issue, Rep. Levin said. “I think they made some necessary changes.”

Both Levins said they will keep watch Monday on U.S. bankruptcy court in New York for a decision to approve Chrysler’s plan to emerge from bankruptcy — both for what’s at stake for Chrysler and what it means for GM.

“That story coming the same day (as GM’s filing) would really reinforce the point that it’s not an end, it’s a beginning,” Sen. Levin said.

None of the lawmakers would confirm that GM will decide to leave its headquarters in Detroit, but Sen. Levin, who opposed a possible move to Warren, said he “can confidently predict good news on that.” McCotter said he was all but certain GM would remain at the Renaissance Center.

“It would have been a cruel irony for GM to go into bankruptcy and on the same day leave the RenCen, which is a symbol of rebirth for Detroit,” McCotter said.