As part of the plan, GM will close 11 facilities and idle three others; in total the automaker could cut as many as 47,000 jobs worldwide. The automaker will also pare down to four brands: Buick, Cadillac, Chevrolet and GMC. The remaining brands, including Saturn and Hummer, will be sold off or discontinued.

As a result of the cuts, GM’s breakeven sales rate will fall to 10 million units, from more than 16 million, vastly improving the company’s financial position.

Nevertheless, GM will still face significant challenges, including the heavy involvement of the US government.

In exchange for what ultimately could be a $70-billion investment by the Treasury Dept, the government will appoint 10 of 12 directors to the new GM’s board. The Canadian government will have the right to appoint one director in exchange for a $9.5 billion loan, and the UAW will appoint the remaining member.

All told, private owners will own less than 20 percent of the reorganized GM.

Despite the government’s assurances that it won’t become involved in the company’s operations, there are already signs that business considerations alone aren’t driving the company’s decision-making process.

GM has said that it will begin producing a smaller, more fuel-efficient vehicle at a recently idled UAW plant despite initially planning to produce these cars in China. Even with the concessions approved by the UAW, this course of action probably isn’t the most cost-efficient option.

Another looming question is just what sort of treatment individual bondholders, who hold about 20 percent of GM’s current debt, will receive in the courts. The Treasury Dept and a syndicate of banks are now the only secured debt holders by virtue of a lifesaving loan and credit facility; individual bondholders have no claims on specific assets. Because individuals didn’t participate in the pre-filing negotiations with institutional bondholders, they will likely realize extremely low recovery rates on their bonds.

Although more jobs and domestic manufacturing are welcome, the treatment of individual debt holders and the heavy hand of the government and union set a dangerous precedent going forward.