GM bankruptcy ‘probable,’ new CEO says
Automaker is planning for either outcome
WASHINGTON – General Motors chief executive Fritz Henderson said the automaker still intends to restructure its business outside of bankruptcy, but a filing is still “probable” given all the concessions it must achieve with such a short deadline.
GM, which has already received $13.4 billion in government loans, is working on a two track plan: outside bankruptcy and inside.
“Contingency planning is under way,” Henderson told reporters Friday morning.
In a push to be more transparent, Friday’s GM conference call was the first of a series of discussions designed to provide updates on the auto giant’s restructuring decisions and actions, which must be completed by June 1.
In keeping with its Feb. 17 submission to the Treasury Department, GM will soon need another cash infusion in the second quarter to keep the company running.
“We expect to need about $5 billion in government funding soon,” Henderson said. “It is premature to say there’s been an approval for further funding.”
GM has not yet made a request for the funds, Henderson said. Last month, GM announced it would forgo $2 billion in federal loans that it thought it needed to stay alive because it was making progress reducing costs.
He emphasized GM’s goal of maintaining “four core brands” – GMC, Buick, Cadillac and Chevrolet – quashing rumors that the automaker is looking to discard GMC and Buick, which have raked in big profits for the company.
The company has also decided not to sell ACDelco, a parts division, despite having potential buyers.