Treasury Team Parked At GM For Next Two Weeks
April 09, 2009
A team from the U.S. Treasury Department is in Detroit this week and next helping General
Motor devise a plan to save the company from a potential June 1 bankruptcy.
The Treasury Department's Harry J. Wilson, a former partner in Silver Point Capital LP, and about 14 other people including advisers from Boston Consulting Group and Rothschild Group are part of the group, Josh Earnest, a White House deputy press secretary, told Bloomberg News. Earnest added that the team will work to speed existing cuts and identify new savings.
Analysts speculate the intense effort by the Treasury team is a means to find an alternative to bankruptcy. GM has softened its position and has said it is open to bankruptcy if necessary, though insists still it is a last resort.
The Treasury group, reports Bloomberg quoting unnamed sources, also includes Xavier Mosquet, senior partner and managing director of Boston Consulting's Detroit office, and people from fields such as fashion who are studying alternative ways for GM to run its business.
GM's efforts, Bloomberg reports, include looking at a so-called 363 sale, a reference to a section of the Chapter 11 bankruptcy code that would help create a new automaker from the assets and brands of GM to boost the company's survival chances. GM would form a new company from its best assets if it files for bankruptcy, according to unnamed sources quoted by various media outlets. Its new cost-cutting goal would go beyond a proposal to slash debt by 46 percent and shed 47,000 jobs in 2009, the reports say.
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