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LISA MULLINS: I'm Lisa Mullins and this is The World. What was unthinkable a year ago happened today. General Motors, an icon of American business, declared bankruptcy. President Barack Obama made the announcement at the White House.

PRESIDENT OBAMA: So I'm confident that the steps I'm announcing today will make the end of an old GM and the beginning of a new GM. A new GM that can produce the high quality, safe and fuel efficient cars of tomorrow, that can lead America towards an energy independent future, and that is once more a symbol of America's success.

MULLINS: Mr. Obama said the U.S. government will inject another $30 billion into GM. That means American taxpayers will own a 60 percent stake in the new company. But GM is a multi-national corporation. Half its sales and half its workers are outside the U.S. The World's Jason Margolis has more.

JASON MARGOLIS: We've had bankruptcies but not a GM bankruptcy. William Holstein is the author of "Why GM Matters."

WILLIAM HOLSTEIN: We have never applied the U.S. Bankruptcy Code to a true multi-national corporation, a globally integrated global corporation and that's what they're attempting to do.

MARGOLIS: Holstein argues that a GM bankruptcy will be "very perilous" with lots of potential hazards. Take one slice of GM's Mexico operation, for example.

HOLSTEIN: Mexico City is where GM buys all their seat belts for all the vehicles they make all over the world. Mexico City is where they make those decisions. So, let's say the Mexican government decides that they're going to seize GM's assets in Mexico because they're concerned about the implications of a bankruptcy and they say, "All right, you now take orders from the Mexican government." So how then would GM anywhere in the world make decisions about what seat belts to buy?

MARGOLIS: The bankruptcy could also have an impact on where GM hires new workers. Foreign factories could actually start losing jobs to America. Here's President Obama speaking about GM's restructuring plan.

PRESIDENT OBAMA: As this plan takes effect, GM will start building a larger share of its cars here at home, including fuel efficient cars. In fact, if all goes according to plan, the share of GM cars sold in the United States that are made here will actually grow for the first time in three decades.

MARGOLIS: The President didn't provide details, but talk like this has some business analysts worried. Donald Grimes is a senior research specialist at the University of Michigan. He grew up in Detroit and he wants what's best for his home state. But Grimes says bringing more manufacturing jobs to Michigan isn't necessarily what's best for a new GM.

DONALD GRIMES: I hope that the jobs go where they're most efficient, and that the company is able to produce in the lowest cost environment, and if that's in Michigan or the upper Midwest, that's great. If it's in China or Mexico, that's where the jobs go.

MARGOLIS: President Obama did say today that GM will decide where to build new plants, that the federal government has no interest in running the company. But members of Congress may not be so willing to give GM complete authority to hire where it wants. Congressman Dennis Kucinich of Ohio told the New York Times that it is unacceptable to ask U.S. workers to subsidize the exportation of their own jobs. Researcher Donald Grimes says U.S. taxpayers are indeed subsidizing the exportation of some jobs but he argues that if we didn't, job losses in Michigan would be even worse. Grimes says for GM to be healthy again, it has to concentrate on where sales are going well. Places like China, India, and South America.

GRIMES: And hopefully we won't get too nationalistic and we'll have to recognize that essentially General Motors is an international company and its success and the continued jobs that are available in Michigan and the United States and the benefits that are going to the retirees is dependent on General Motors being a successful international company.

MARGOLIS: That might be a tough sell here at home, though. With U.S. taxpayers now on the hook for $50 billion to GM, Americans are going to want more jobs at home and not just in places like China. For The World, I'm Jason Margolis.

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