In a desperate bid to avoid bankruptcy, General Motors Corp. yesterday launched a massive restructuring plan that would eliminate jobs, dealerships and debt, phase out the storied Pontiac brand, and leave the federal government owning at least half of the troubled automaker.

The plan, which includes an offer to swap roughly $27 billion in bond debt for GM stock, would leave current shareholders owning just 1 percent of the century-old company, which is fighting for its life in the worst auto sales climate in 27 years.

GM is living on $15.4 billion in government loans it has received since late December and said yesterday in a filing with the Securities and Exchange Commission that it envisions receiving an additional $11.6 billion - $2.6 billion of it by June 1. But if GM's restructuring plan can't satisfy the government by that day, the struggling company said it could go into bankruptcy protection.

The plan would eliminate 2,600 dealers, 21,000 workers; and four GM brands: GM said it would accelerate the wind-down of its Hummer, Saturn and Saab brands, ceasing production by year's end. Pontiac will be terminated after 2010.

The Detroit automaker announced the sweeping moves as part of a revised business plan it is submitting to the Treasury Department.

The new plan is centered on a debt-for-equity offering GM is extending to holders of $27 billion in bonds. In other words, those investors who bought GM debt would, instead, become shareholders of the company. At least 90 percent of holders of outstanding bonds must accept, the company said, or it will file for bankruptcy by June.

"The objective here is not to survive, the objective is to develop an operating plan that helps us win," said Fritz Henderson, GM's president and chief executive in a conference call. "It's a difficult period, it's a challenging period, it's a very painful period."

GM said that it would ask the government to take more than 50 percent of the company's common stock in exchange for canceling half the government loans to the company as of June 1. The swap would cancel about $10 billion in government debt.

In addition, GM is offering stock to the United Auto Workers for at least 50 percent 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 are successful, the government and UAW health-care trust would own 89 percent of GM stock, with the government holding more than a 50 percent stake, Henderson said.

This was GM's third restructuring plan since December. This time, it plans to incorporate cuts sufficient to allow the company to break even in a market with total industry sales as low as 10.5 million vehicles in the U.S. annually.

Last year, 13.5 million cars and light trucks were sold in the U.S., but through the first quarter of this year, sales were on pace to reach only 9.8 million vehicles.

Last month, the Treasury Department's autos task force rejected GM's previous restructuring plan, submitted on Feb. 17, saying it was insufficient in scope and reach.

GM was given until June 1 to show the Obama administration it has a sustainable business model or perhaps be forced into bankruptcy.

Although GM has reached a tentative agreement with the United Auto Workers on labor costs - a deal not yet ratified - it is still negotiating reductions in payments due to a retiree health-care trust.

At the same time, its new plan contemplates further layoffs.

GM said it would eliminate 21,000 salaried and hourly jobs by the end of next year, 7,000 more than previously announced, and would shut 13 plants. By 2010, it will sell only 34 car models, down from 48 in 2007.

With Pontiac, Hummer, Saab and Saturn to be eliminated, GM will focus on Chevrolet, Cadillac, GMC and Buick. GM eliminated its Oldsmobile brand in 2004.

GM's latest plan predicts that its share of the U.S. vehicle market will drop to 18.5 percent by 2014. The share was 22.1 percent last year - and nearly 35 percent in 1991.

GM's sales through the first quarter this year are down 43 percent from a year before.

GM lost $30.9 billion in 2008.

The Associated Press contributed to this report.