GM CEO Softens Company's Opposition to Bankruptcy

DETROIT (AP) - General Motors Corp. is softening its opposition
to bankruptcy reorganization a little more.

"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.

"If necessary, we'll go into bankruptcy to get the job done,"
he said. "Our preference is to get it done outside bankruptcy."

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."

"Our test is, what's going to work," he said. "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."

Henderson also said he does not believe the administration
should encourage Americans to buy U.S.-made cars.

"I think the consumer should buy exactly what kind of car they
think meets their needs and that excites them," he said on "Meet
the Press." "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."

Also, Henderson said that unlike Wagoner, he will not work for
$1 a year. He is paid $1.3 million, a salary which was cut 30
percent as part of what he called shared sacrifices at the auto
maker.

The Detroit automaker said in February it was aiming to shrink
U.S. employment to 72,000 by 2012, down from 92,000 hourly and
salaried employees at the end of last year. Henderson said the auto
task force concluded the company needed to cut more, and faster.

That conclusion is "certainly going to require us to be leaner
than we had even foreseen in February," he said. The numbers
haven't been finalized, but they would amount to a "significant
additional change for the company," he said.

Henderson is aiming to minimize the amount of time GM relies on
taxpayer money.

"One of the saddest days of my career was when we needed to
borrow money from the U.S. taxpayer," he said. "And I'm quite
convinced that one of the happiest days of my career is when we
repay it."

(Copyright 2009 by The Associated Press. All Rights Reserved.)


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