Fighting to stave off bankruptcy, General Motors Corp on Monday said it would cut 21,000 factory jobs in the US by next year, phase out its famous Pontiac brand, and ask the government to take more than half its stock in exchange for half of GM's government debt as part of a major restructuring that would leave current shareholders holding just 1 percent of the company.

In a filing before the Securities and Exchange Commission, the struggling automaker 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 that aims to shed most of GM's $27 billion in unsecured debt.

The former US auto biggie is now surviving on a $15.4 billion government handout, and faces a 1 June deadline to restructure in order to get more government money. If the restructuring doesn't satisfy the government, the company could go into Chapter 11 bankruptcy.

GM said in a news release that it will ask the government to take 50 per cent of its common stock in exchange for cancelling half the government loans to the company as of 1 June.

In addition, GM is offering the United Auto Workers union stock for at least 50 per cent 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 propositions are successful, the government and the UAW health care trust would own 89 per cent of the company's stock, with the government holding more than 50 per cent, Henderson said. However, deals with the UAW and the treasury have yet to be finalised, he added.

Henderson said the objective of the bond-for-equity trade is to reduce GM's $27 billion of outstanding debt by about $24 billion. The company estimates that after the exchange, bondholders would own 10 per cent of the company, and current common stockholders with only 1 per cent.

Henderson also said if the exchange isn't successful, he would expect to file for bankruptcy protection.

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. Including previously announced plant closures, the restructuring will leave GM with 34 factories at the end of next year, down from 47 at the end of 2008.

The company also said it plans to reduce its dealership ranks by 42 per cent from 2008 to 2010, cutting them from 6,246 to 3,605.