GM to cut 21,000 U.S. jobs, shed Pontiac-WEB ONLY

General Motors Corp. said it will cut 21,000 U.S. factory jobs by next year, phase out its storied Pontiac brand and ask the government to take company stock in exchange for half of GM’s government debt as part of a major restructuring effort needed to get more government aid.

The struggling automaker also said it will offer 225 shares of common stock for every $1,000 in notes held by bondholders as part of a debt-for-equity swap.

The announcements came in a filing this morning with the Securities and Exchange Commission.

GM is surviving on $15.4 billion in government loans and faces a June 1 deadline to restructure and get more government money. If the restructuring doesn’t satisfy the government, the company could go into bankruptcy protection.

GM said in a press release that it also will ask the government to take 50 percent of its common stock in exchange for canceling half the government loans to the company as of June 1.

GM said the bond exchange would wipe away $27 billion in unsecured debt if successful. The company estimates that after the exchange, bondholders would own 10 percent of the company.

In addition, GM is offering the United Auto Workers stock for at least 50 percent of the $20 billion the company must pay into a union run trust that will take over retiree health care expenses starting next year.

All the stock offerings mean that current common stockholders would own only 1 percent of the company under the deals, the press release says.