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.
If both are successful, the government and UAW health care trust would own 89 percent of the company's stock, with the government holding more than a 50 percent stake, GM CEO Fritz Henderson said.
President Barack Obama's administration said in a statement that the bond exchange filing is an important step in GM's restructuring efforts. The administration has not made a final decision about taking stock for part of its loans to the company, the statement said.
"The interim plan that GM laid out in this filing reflects the work GM has done since March 30 to chart a new path to financial viability. We will continue to work with GM's management as it refines and finalizes this plan and with all of GM's stakeholders to help GM restructure consistent with the President's commitment to a strong, vibrant American auto industry," the statement said.
Henderson said that although the government would own 50 percent or more of GM's outstanding common shares, the Treasury "hasn't demonstrated interest in running the company," but would have someone on the board looking out for the taxpayer's interest. The task force has directed current board chairman Kent Kresa to replace several board members.
"The shareholders, the VEBA (health care trust) and the government would want to have a someone on the board of directors," he said. "Shareholders have the right to basically select board members."
Deals with the UAW and the Treasury have yet to be finalized, he said.
Henderson said the objective of the bond exchange is to reduce GM's $27 billion of outstanding public debt by about $24 billion. The company estimates that after the exchange, bondholders would own 10 percent of the company.
That would leave current common stockholders with only 1 percent of the company under the deals, GM said.
GM shares rose 46 cents, or 27.2 percent, to $2.15 in morning trading.
The plans would reduce GM's debt by $44 billion from the present figure of about $62.4 billion.
"We would be substantially less levered as a company," said Henderson, who answered questions at GM's Detroit headquarters while sitting in a chair on a stage with a gray curtain behind him. At times, he drank from a glass of water on a small table nearby.
Henderson said if the exchange isn't successful, he would expect GM to file for bankruptcy protection somewhere around June 1, but such a filing would be unlikely very long before the deadline. Bondholders have until May 26 to accept the exchange offer.
Henderson said the company still prefers to restructure outside of court, but he acknowledged that the prospect GM will file for bankruptcy protection is more likely now that it was a few weeks ago.
"The task at hand in terms of what we need to get done is formidable," Henderson said. "But it can be done."
GM said it would speed up six additional factory closings that were announced in February, although it did not identify them in its news release. Additional salaried jobs cuts also are coming, beyond the 3,400 in the U.S. completed last week.
Henderson said there would be three more factory closures in 2010 beyond the six that were previously announced. He expects to identify them by publicly sometime in May. They will include assembly, engine and transmission and parts stamping factories, he said.
Including previously announced plant closures, the restructuring will leave GM with 34 factories at the end of next year, 13 fewer than the 47 it had at the end of 2008.