CAR giant General Motors will emerge from bankruptcy as a “stronger and more competitive” company, US President Barack Obama said.

The US Government is to pump billions of dollars into the firm as it takes a majority stake in a “new GM” that will be streamlined as a result of its reorganisation.

President Obama said despite taking a 60% share in the company, the restructured firm would not be run from Washington.

“Our goal is to get GM back on its feet, take a hands off approach, and get out quickly,” he said.

In an anticipated move, GM filed for Chapter 11 bankruptcy protection yesterday morning.

It allows the firm to restructure without going into liquidation. As such, it will continue to operate as a going concern while it goes through the process, which should take 60 to 90 days.

It is the fourth largest bankruptcy in US history and the largest for an industrial company.

GM Europe, which includes Vauxhall and German brand Opel, said yesterday it was business as usual despite GM’s bankruptcy.

It has been given £1.3bn in support by the German government after signing a memorandum of understanding with Canadian car parts giant Magna.

GM Europe President Carl-Peter Forster said: “With the financing, even with the GM actions in the US, we can now confidently say to our employees, customers, suppliers and dealers that it’s business as usual as we go through the process of creating a new, more independent Opel/Vauxhall.”

GM is the second of the “big three” Detroit car makers to enter into bankruptcy.

In late April, Chrysler filed for Chapter 11 protection while it hammered out a deal with Fiat.

Yesterday a bankruptcy judge approved the sale of most of its assets to the Italian car maker.