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GM CEO softens company's opposition to bankruptcy

(Agencies)
Updated: 2009-04-08 10:36

DETROIT – General Motors Corp. is softening its opposition to bankruptcy reorganization a little more.

An empty desk is seen inside the General Motors Corp.'s Harlem Auto Mall showroom in New York April 7, 2009. General Motors Corp is in "intense" and "earnest" preparations for a possible bankruptcy filing, a source familiar with the company's plans told Reuters on Tuesday. [Agencies]

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"If it's required, that's what we'll do," new Chief Executive Fritz Henderson said in an interview broadcast Sunday, but noted that GM still would prefer to avoid bankruptcy protection while restructuring.

President Barack Obama and his auto industry task force have indicated that bankruptcy protection "may very well be the best solution for the company to achieve these goals," Henderson told CNN's "State of the Union."

That is why, he said, "when you look at the situation, we said, 'OK, we'll spend the time to try to complete the work, more aggressive work, outside of the court process, but if it's required, that's what we'll do.'"

Obama had said GM's initial plans to become viable didn't go far enough. Last week, he told the company it had 60 days to make more cuts and get more concessions from bondholders and unions, or it won't get any more government help.

The administration also forced out Rick Wagoner as chief executive; Henderson took over on March 29.

Henderson said the government's guarantee of GM warranties and its indication that it would lend money to the automaker while it reorganized under bankruptcy protection are both "strong signals which say even if we have to go through bankruptcy, the company's going to be there."

He told NBC's "Meet the Press" that GM needs to "go deeper and we need to go faster" in its restructuring.

"We either accomplish this job outside of bankruptcy in the short term, or alternatively, if it's necessary, we'll go into bankruptcy in order to get this job done," he said.

Treasury Secretary Timothy Geithner, asked on CBS' "Face the Nation" Sunday if he agreed with Henderson that bankruptcy is a possibility, said several options "could work."

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