GM CEO Says Still Hope Of Avoiding Chapter 11
11 Mai 2009 - 5:45PM
Dow Jones News
General Motors Corp. (GM) said Monday it could still avoid
seeking bankruptcy protection, though key elements of its
restructuring plan remain in flux.
The auto maker has just three weeks to resolve union and
creditor discussions, finalize the fate of ailing brands and cull
its U.S. dealer network.
"We need to move, and we need to move fast," said CEO Fritz
Henderson on a conference call, as the company closes in on the
June 1 deadline set by the U.S. administration. "We think there is
still an opportunity for this to be done out of court."
GM shares were recently down 9.3% at $1.46, having earlier hit
$1.40, the lowest level since early March.
With a deadline set for a planned bond exchange and union talks
expected to continue up until the deadline, Henderson did indicate
some progress on GM's slimmed-down brand profile.
He said GM is negotiating with two bidders on Hummer and
continues talks to shed Saab and Saturn. He also confirmed the
Pontiac brand will be wound down rather than sold.
GM dealers will learn this week if they are among those marked
to close as it looks to shutter 2,600 of its more than 6,000 U.S.
outlets.
Talks continue with the United Auto Workers to cut in half of
GM's obligations to a $20 billion retiree health care trust in
exchange for 38% of its equity. The two sides also are in talks
over which U.S. factories will close.
Outside the U.S., the company is struggling as well. Henderson
said funding needs in Europe, where losses are mounting and GM is
looking to offload its Opel and Saab brands, are "urgent."
Henderson said the company would consider holding a minority
stake.
Henderson said GM has no plans to alter the debt exchange offer
despite a broad dissatisfaction from bondholders. GM is offering to
exchange 225 common shares for each $1,000 principal amount of
outstanding notes.
The exchange will commence only if 90% of bondholders agree to
the terms. Under the plan, if GM fails to get adequate
participation, it will file for bankruptcy protection.
The automaker had been considering moving its headquarters out
of downtown Detroit's spacious Renaissance Center skyscraper among
cost cutting options, Henderson said. He said the relocation is no
longer a priority.
-By Sharon Terlep, Dow Jones Newswires; 248-204-5532;
sharon.terlep@dowjones.com.