General Motors will be split in two – one part containing assets and one saddled with liabilities – after filing for bankruptcy protection

What has happened today?

At about 1pm UK time, General Motors, until last year the world's largest carmaker, filed for Chapter 11 protection in a New York court. With $176.4bn (£107bn) of liabilities and $91bn of assets globally at the end of last year, it is the world's largest industrial bankruptcy, and the world's third largest to date, after Lehman Brothers and the telecoms firm WorldCom.

What will this mean for GM?

The car manufacturer will in effect secure a standstill arrangement under the protection of the courts. This gives it breathing space from creditors, allowing it to focus on restructuring.

How will GM restructure itself?

GM has opted for a fast-track version of Chapter 11 protection. The company will split itself into a "good company", holding most of its assets and a "bad company" lumbered with most of its liabilities, such as loss-making plants. As part of the plan, GM is offloading its European business, including Vauxhall in the UK, although it will retain a 35% stake in the business.

How long will this take?

US government officials think GM could re-merge after this process within about three months. While US companies can spend months or years under Chapter 11, GM wants to exit as quickly as possible. Consumers are put off buying cars from a company that they think may be unable to supply parts in the future or may disappear altogether.

Who will own the new GM?

The US treasury will provide another $30bn to the new company in return for about 60% of its equity. The Canadian government will get 12% of shares in return for lending $9.5bn. The United Auto Workers union will take 17.5% in shares and bondholders have written off $27bn of loans for an initial 10% stake.

What will the 'new GM' look like?

It will be a much slimmed-down version. About one-third of its 61,000 workforce in the US will lose their jobs by the end of 2010, on top of thousands of cuts made in the last year. More than 10 factories in the US will close and its dealership network will be halved. The new company will focus more on making smaller, more fuel-efficient vehicles, and will offload or cease production of its Hummer, Saab, Pontiac and Saturn brands.

What does this mean for Vauxhall in the UK?

Not a great deal. Vauxhall used to be part of General Motors Europe. Last week, it was formally transferred to Opel in Germany, which is itself now no longer under the full ownership of GM in the US. The fate of the 5,500 Vauxhall workers now rest on the new owners of Opel/Vauxhall, the Canadian car parts firm Magna, which is backed by Russian investors.