By Shawn Langlois
SAN FRANCISCO (Dow Jones) - General Motors Corp. CEO Fritz
Henderson on Friday said that while it's not the preferred option,
bankruptcy remains a likely outcome of the automaker's drawn-out
saga considering the demands of the Obama administration.
"I felt several weeks ago that it would be more probable that we
would need to go through a bankruptcy process. I certainly feel
that way. That continues today," Henderson said.
His comments were the first in what the company said will likely
be a series of updates ahead of the deadline at the end of next
month for GM (GM) to prove its viability.
Henderson reiterated his stance that reshaping the Detroit giant
can still be achieved outside of the courtrooms, though he said GM
will be ready should it come to that.
"Our preference is to try to accomplish this outside of a
bankruptcy process," he said. "It is still feasible to be able to
do that, given the timing, but obviously, the clock is
ticking."
He also downplayed what he called "speculation" swirling around
GM's brand strategy and whether it has already received approval
for further government funding.
"We are, frankly, kind of taking the watch apart, step by step,
and then rebuilding it, asking questions to make sure, for example,
in brands, we have a purpose for every one of our brands, our four
core brands that we've talked about," he said.
Chevrolet, Cadillac, GMC and Buick are considered the "core"
brands with Pontiac remaining in the fold as a niche product.
Recent reports claim that GM, under pressure from President Obama's
auto task force, is looking to drop both Pontiac and GMC. Saturn,
Saab and Hummer are already on the chopping block.
Henderson added that, despite earlier reports, it would be
"premature" to say that GM has been approved for another $5 billion
beyond the $13.4 billion it has already received from the
government. He admitted, however, that the number is "very
consistent with what we had laid out in our plan" back in
February.
With regard to reaching concessions from bondholders and the
unions, Henderson said that while discussions are still ongoing, no
deal has been made yet.
"One of the things that was clear ... from the task force
findings [in February] is that we needed to go deeper and faster
with respect to balance sheet restructuring, and so, anything that
had been on the table up to that point was off the table," he
said.
Part of the move to ramp up restructuring efforts will include
more job losses from both blue-collar and salaried workers,
Henderson said, though he didn't offer any specific numbers.
"As our plan gets finalized and we talk to the people who are
affected by it, this is something that we expect to be able to get
accomplished by no later than June 1," he said.
GM shares were flat at $1.94 in midday trades and are down 90%
in the past year.