The bell certainly tolled for GM, but some new information has come to light in the on-going struggle to keep General Motors producing automobiles. In a startling announcement today, GM is expected to hand over nearly 70% of the company to the Treasury Department. What are the possible implications of this nationalizing? Hit the jump.

First and foremost, I did not think that the government would ever get as much as a 70% stake in GM after bankruptcy filings. Apparently I was wrong because that number is more than just floating around in the negotiations between GM and the Treasury Department less than a week before GM files for Chapter 11 bankruptcy protection. If things go according to current plans, the government would own over 2/3 of the company with the unions picking up 20% and bondholders stand to grab the remaining 10%. Bad news for you shareholders, because your small stake in GM will be basically wiped out.

What I’m more concerned about are the possible ramifications of a heavy government stake in the world’s second largest automaker (Toyota being #1). Will the Feds throw their weight behind decisions regarding horsepower and emissions standards? What will happen to performance models that do not get ideal gas mileage in the coming years (the Camaro in particular)? An interesting question brought up by the Gray Lady surrounds the future fleet vehicle purchases by the government. Will Ford get the shaft when it comes to government contracts? Although President Obama stated that the government has no intentions of running the company who is to say there won’t be some backdoor influences. Time will tell so stay tuned. [Source: NY Times].