Bankruptcy still an option: New GM CEO
General Motors Corp's new chief executive said Monday there is a greater risk that the company will have to reorganize through bankruptcy, because of greater demands from the Obama administration to get debt off its balance sheet.
By Agencies |
DETROIT: General Motors Corp's new chief executive said Monday there is a greater risk that the company will have to reorganize through bankruptcy, because of greater demands from the Obama administration to get debt off its balance sheet.
Fritz Henderson told reporters on a conference call that the company would still prefer to restructure outside of court, but the various support mechanisms President Barack Obama outlined Monday would provide a better cushion for the company to reorganize under a court-order bankruptcy if necessary.
``We were encouraged, we talked to the auto task force about ultimately bringing the consumer back in the game,'' he said.
Obama said he would give GM additional days to present and make progress on restructuring plans that are expected to go further than what was submitted in February. He also introduced a program that would guarantee warranties of GM and Chrysler LLC vehicles going forward, and would allow people purchasing new cars this year to write off the sales and excise tax of the vehicle.
``We understand what the game plan is,'' Henderson said. ``Whether out of court or in court, either way, they'll be there to support us.''
It's Henderson's first day of the job, after Rick Wagoner resigned at the government's request. Former board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.
He said the goal is to work with bondholders and the United Auto Workers union to get more concessions in an effort to make GM viable long-term.
``We need to move faster and even deeper,'' he said. ``Our job is to run with that.''
Henderson said he didn't intend to make major executive changes. ``The last thing I want to do in this 60-day period is start changing a lot of people,'' he said.
Fritz Henderson told reporters on a conference call that the company would still prefer to restructure outside of court, but the various support mechanisms President Barack Obama outlined Monday would provide a better cushion for the company to reorganize under a court-order bankruptcy if necessary.
``We were encouraged, we talked to the auto task force about ultimately bringing the consumer back in the game,'' he said.
Obama said he would give GM additional days to present and make progress on restructuring plans that are expected to go further than what was submitted in February. He also introduced a program that would guarantee warranties of GM and Chrysler LLC vehicles going forward, and would allow people purchasing new cars this year to write off the sales and excise tax of the vehicle.
``We understand what the game plan is,'' Henderson said. ``Whether out of court or in court, either way, they'll be there to support us.''
It's Henderson's first day of the job, after Rick Wagoner resigned at the government's request. Former board member Kent Kresa, the former chairman and CEO of defense contractor Northrop Grumman Corp., was named interim chairman of the GM board.
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He said the goal is to work with bondholders and the United Auto Workers union to get more concessions in an effort to make GM viable long-term.
``We need to move faster and even deeper,'' he said. ``Our job is to run with that.''
Henderson said he didn't intend to make major executive changes. ``The last thing I want to do in this 60-day period is start changing a lot of people,'' he said.
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