DOW JONES NEWSWIRES
General Motors Corp. (GM) hasn't changed its position on
bankruptcy, saying that restructuring the business out of court
remains the best solution.
The giant auto maker, already in a weakened position, has
suffered greatly as tight credit and the recession force customers
to put off purchasing big-ticket items. GM's shares were recently
down 22% at $1.46. The stock is off some 55% so far this year and
93% in the last 12 months.
The company said Friday it has analyzed various bankruptcy
scenarios but believes the costs and risks are too high. GM, in a
100-plus page report submitted to the U.S. Treasury on Feb. 17,
argued that bankruptcy would be more costly and drawn out than a
government-funded restructuring. The auto maker said a traditional
bankruptcy could cost as much as $100 billion, much of that in lost
revenue.
The Wall Street Journal on Friday reported that top GM
executives were more open to a speedy bankruptcy reorganization
financed by the government.
A person familiar with the matter said that after months of
research, including analysis done by top bankruptcy advisers, the
company had come to believe it could emerge from a prepackaged
bankruptcy, under which the various constituents - unions,
suppliers and bondholders - would agree in advance to
concessions.
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Though GM has said all along that it would prefer to avoid
bankruptcy at all costs, the company's Saab unit filed for similar
protection in Sweden after GM made it an independent operating
unit. The company's Opel unit in Germany is also reportedly talking
to bankruptcy lawyers.
-By Kerry E. Grace, Dow Jones Newswires; 201-938-5089;
kerry.grace@dowjones.com