THE EVENT: General Motors Corp. (GM) stepped up its restructuring plan Monday, saying it will cut 21,000 hourly jobs and eliminate its Pontiac brand by the end of next year. It will also start an exchange offer for $27 billion of its unsecured public notes that. Based on Friday's stock close of $1.69, the exchange offer would be worth 38 cents on the dollar, not factoring in the massive dilution implied in the tender offer. That's higher than the 8.5 to 12 cents GM bonds fetched in the secondary market, but shareholders would be wiped out.

At GM's current market valuation of $1.31 billion, a 10% stake like the one offered bondholders would be worth $131 million - making the tender offer worth about half a cent on the dollar.

Under the plan, the U.S. government would be the majority owner in the auto maker in return for an extra $11.6 billion in federal aid. The exchange will commence only if 90% of bondholders agree to the terms. Under the plan, if GM fails to get adequate participation, it will file for bankruptcy protection. The company also said it will cut U.S. dealer count by more than 40% by the end of next year. The company said it will focus on four core brands in the U.S. - Chevrolet, Cadillac, Buick and GMC - as it looks to make fewer different models and focus on product development.

WHAT IT MEANS: GM, which is surviving on federal loans, is racing to restructure by June 1 under close watch of the Obama administration. The bond-exchange filing represents an important step in GM's effort to restructure its company, President Barack Obama's automotive task force said in a statement. But GM CEO Fritz Henderson said sufficient acceptance of the debt-swap offer is far from certain and a Chapter 11 filing is now "more likely."

MARKETS: GM shares jumped on the news. They were recently up 25% and had risen as much as 34% earlier. GM credit default swaps are falling. It costs investors $8.1 million upfront plus a $500,000 annual fee, to protect $10 million of GM senior bonds for one year, according to Phoenix Partners. That's against $8.4 million upfront before the news.

Following are key stories:

.-UPDATE: GM To Cut 21,000 Hourly Jobs, Eliminate Pontiac Brand

.-=UPDATE: GM Launches Massively Dilutive Debt Exchange

.-White House: GM Bond Exchange An 'Important Step'

.-GM CEO: 'I Am More Focused On Getting Results Rather Than Being Big'

.-GM Canada Work Force To Drop To 4,400 In 2014 From 10,300 In 2008

.-GM: Will Continue Talks With Possible Opel Investors In May

.-GM CEO: Co Will Outline Options For Its Dealers In May -CNBC