GM's Henderson: File Bankruptcy Only if Required
By Michelle Krebs April 6, 2009By Michelle Krebs
Less than a week after becoming the new CEO of General Motors, replacing ousted Rick Wagoner
, Fritz Henderson
appeared on two major news shows Sunday -- CNN's State of the Union
and NBC's Meet the Press.
In both interviews, Henderson insisted the automaker still prefers to avoid bankruptcy court to accomplish its restructuring, "but if it's required, that's what we'll do."
Henderson reiterated on Meet the Press what he'd told the media in his first press conference last Tuesday 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."
GM, Chrysler: Back To The Drawing Board
Last Monday, President Obama announced that his automotive task force gave failing grades to the viability plans submitted to the government by GM and Chrysler. The president sent the two automakers, which have received a total of $17.4 billion in federal loans so far and are asking for more, back to the drawing board to revise their restructuring plans.
GM has 60 days to make more cuts and obtain concessions from union workers and bondholders. During that time, GM will receive working capital from the government and, if GM is forced into bankruptcy court as Obama has suggested may be the best solution, the government will help finance its restructuring there.
Henderson said that backing sends "strong signals which say even if we have to go through bankruptcy, the company's going to be there."
Geithner: GM Is Part of U.S. Future
Indeed, on CBS's Face the Nation, U.S. Treasury Secretary Timothy F. Geithner said GM "is going to be a part of this country's future," but said that a managed bankruptcy was among the options for the company.
"These guys have made some progress in putting together a restructuring plan, but they're not there yet," Geithner said. "We wanted to give them the time to try to get it right. But, again, our objective is to allow -- is to help these companies emerge stronger in the future so they can survive without government assistance."
Geithner, asked if he agreed with Henderson that bankruptcy is a possibility, said several options "could work."
He said: "Our test is, what's going to work. What's going to help bring about the kind of restructuring, allow them to emerge stronger and be part of this American economy. We want them to be part of our future."
GM: Deeper, Faster
Henderson told Meet the Press host David Gregory what he had said last week -- that GM had to reinvent itself.
"The conclusion (of the Obama auto task force) was not far enough, not fast enough. And candidly, that's where our charge is going forward, how we go deeper, faster," Henderson said.
Henderson repeated on the Sunday talk shows what he told the media in Detroit last week is that likely will mean even more job cuts, though he again refused to provide numbers, saying only it would amount to a "significant additional change for the company." It is "certainly going to require us to be leaner than we had even foreseen in February," he said.
GM's original plan called for its U.S. employment to shrink by 20,000 hourly and salaried jobs to 72,000 by 2012.
"We need to go further," he told CNN. "And I think at this point, it would be inappropriate for me to try to guess what that might be. I just know this, if the conclusion is you've got to go deeper and you've got to go faster, you can't really afford to take anything off the table.... We will change; we will be fundamentally different going forward. And the company's going to be reinvented."
Meantime, David Axelrod, a senior adviser to President Obama, told Fox News Sunday that GM workers shouldn't have to make "disproportionate" concessions. Axelrod said the United Auto Workers union has taken "huge concessions" already and that creditors and company executives must do the same. "What we shouldn't do is ask that sacrifices of the workers be disproportionate," he said.
Henderson: Taking Taxpayer Dollars a Dark Day
Henderson said in Sunday interviews that the day he realized that the company had to take government loans to keep GM afloat was a dark day.
"The day we took money from the taxpayer was one of the most difficult days of certainly my career and of the history of General Motors," said the Detroit-born son of a Buick dealer with a GM career that spans more than two decades.
"And one of the, one of the happiest days of my future career is going to be the day we pay the loans back," Henderson quickly added.
Press-savvy Henderson smartly refused to get drawn into hot-potato political discussions.
Countering critics who charge that the firing of Wagoner shows the government wants to run GM, Henderson insisted: "I think the Administration and the task force has been very clear, they don't wish to run General Motors. They expect us to get our job done."
Henderson did acknowledge he has "several masters," from his new boss at GM to the Obama Administration. His immediate boss is now GM Chairman Kent Kresa, an outside GM member of the board and chairman emeritus of defense contractor Northrop Grumman. The titles of CEO and chairman, previously both held by Wagoner, were split last week between Henderson and Kersa. Henderson said he has a direct line into the president's auto task force.
For his effort, Henderson will make a real salary, not the $1 a year that his predecessor Wagoner agreed to as part of the government loan package. Henderson will receive a salary of $1.3 million, which represents a 30 percent cut.
"As part of the loan agreement, we agreed to work without any form of incentives. I don't have a contract. We don't have golden parachutes. I have 25 years at the company. I don't have a pension," Henderson said Sunday.
Henderson sidestepped a question on the double standard of the government playing tough with the auto industry while being lax with the financial industry.
"I don't really think about what happens in other industries," he said on Meet the Press. "It's not for me to say, it's not a worry of mine. Our worry is how do we get General Motors going forward."
On the controversial subject of "buying American," Henderson told interviewers he believes Americans should make their own choice. "I think the consumer should buy exactly what kind of car they think meets their needs and that excites them," he said. "And it's our job to make sure we provide that and as I look at it, not necessarily have it mandated or otherwise encouraged."
He added: "We have fantastic cars and trucks. We're going to win in the marketplace and not necessarily because we're a U.S. company."
Meantime, Silence in Auburn Hills
As GM's Henderson made the rounds of telvevision news shows, held a press conference and sat down for a host of media interviews, Chrysler has been silent.
Chrysler has 30 days to complete a deal with Italy's Fiat, during which time it will receive working capital. However, the U.S. government will not provide financing if it goes into bankruptcy.
Last week, Fiat CEO Sergio Marchionne and company came to Detroit to flesh out details of a Chrysler-Fiat alliance. So far, only the "framework" of a deal has been agreed upon by the two parties.
Photos
1 - GM CEO Fritz Henderson on NBC's Meet the Press (Photo courtesy of NBC)
2 - U.S. Treasury Secretary Timothy Geithner on CBS's Face the Nation (Photo courtesy of CBS)
LEAVE A COMMENT