GM's Henderson: Bankruptcy More Probable
May 11, 2009
By Michelle Krebs
DETROIT -- With a June 1 government-imposed deadline for a new viability plan looming, General Motors CEO Fritz Henderson said, as he has before, that bankruptcy is more probable than it was.
"Given the objectives set out, it's more probable that we would need to accomplish this in bankruptcy," Henderson said in a conference call to update media on GM's restructuring progress. "The task we have in front of us is large. But there's still an opportunity to do this outside of court."
Henderson said GM intended to have some basic understanding of an agreement for its GM Europe business no later than the end of ths month and hopefully slightly before the end of the month. He said GM is talking with multiple bidders -- Fiat is known to be one of them. Any partner, Henderson said, would have to be suitable to the German government, from which GM is seeking financial support.
He said GM could take a minority stake in the new entity that could operate as GM does in Korea with Daewoo, in which GM holds just over 50 percent equity or GM China, which is a 50-50 joint venture with China's SAIC.
Fiat is rumored to be interested in GM's Latin America, Africa and Middle East (LAAM) unit. Henderson wouldn't say if GM would give it up, commenting only that "LAAM has been a solid contributor in the last several years...we know that region well and have enjoyed a great return over a time. It's a business we know and we like."
Henderson, despite numerous questions, would comment little about talks with the United Auto Workers union, saying only the two sides "are in dialogue." Of major concern of late to the UAW are GM's plans to double the number of vehicles the automaker builds outside of the U.S. to sell here. Henderson seemed to hint that the number would be negotiable.
He said GM's current plan calls for 7.5 percent of production for U.S. sales -- about 235,000 vehicles under a half-dozen programs -- coming from outside of the U.S. by 2014. "We would have a discussion about that," he said. "Our philosophy of building where we sell is the right thing and usually the most profitable."
Henderson said a deal to sell Hummer has moved more slowly than he'd hoped; originally it was to be done by March 31. He said GM received three offers for Hummer and is negotiating with two. If there's a deal to be reached, he said, it will be done by the end of this month.
GM remains supportive of Saturn finding a buyer for the distribution channel and talks are ongoing in that regard.
As for Pontiac, there are no conversations with interested parties for its sale. Instead, GM will wind down the division.
Saab is in talks with a number of interested bidders, Henderson said. "That will take more shape and form in the next month or two versus next week or two."
GM will finalize its plans for which dealers the automaker will cut early this week and dealers will be notified by the end of the week, he said. Those dealerships will be wound down through the end of 2009.
On GM moving its headquarters out of downtown Detroit's Renaissance Center as has been rumored, Henderson said: "We're looking at frankly everything within our business. We've not cued that up at the top of the list. But we're looking at everything as we slim down."
Posted by Michelle Krebs at 6:29 AM under GM , News | Comments (1) | digg this | Seed Newsvine
It was always a gamble as to whether or not GM would end up in bankruptcy... guess we have our answer?
Posted by: sylvia | May 13, 2009 at 1:58 PM