GM CEO Henderson says bankruptcy not inevitable
Bankruptcy is not inevitable for General Motors Corp, said the automaker's new chief executive on Sunday, who is under White House orders to win more concessions from bondholders and unionized workers.
Fritz Henderson became chief executive a week ago after a White House auto task force rejected the turnaround plans submitted by GM and Chrysler LLC. The automakers were told they had to write broader plans to restructure.
The U.S. auto industry, including dealers and suppliers, has cut 400,000 jobs over the past year while losing billions of dollars. GM received $13.4 billion last year and requested an additional $16 billion. Chrysler also has asked for a new round of aid.
Asked on NBC's "Meet the Press" if bankruptcy was inevitable, Henderson replied, "No." He said he intended to meet the administration's demand to move more rapidly and to cut more deeply. The White House set a 60-day deadline for results.
"We are planning to get the job done. Our preference would be to do it outside of the bankruptcy process," Henderson said. "If it cannot be done outside a bankruptcy process, it will be done within it."
David Axelrod, a senior adviser to President Barack Obama, said the goal was to make the automobile companies viable.
"We want these to be going concerns -- not wards of the state," he told "Fox News Sunday."
"So whether it comes from some sort of structured bankruptcy or another process, there is no doubt that for General Motors to survive and prosper, as we all want them to, they're going to have to do serious restructuring."
Henderson, also appearing on CNN's "State of the Union," said there would be more job cuts and plant closings. "You can't really afford to take anything off the table," he said. He was not asked about efforts to rework $28 billion in debt to bondholders.
U.S. auto sales fell by 37 percent in March, the 17th month in a row of declines.
Senator Debbie Stabenow, a Michigan Democrat, said there is "tremendous pain in our state" because of layoffs and financial losses in the auto industry, which is headquartered in Detroit.
"I do not support bankruptcy as the first, second or third option," Stabenow said. Bankruptcy could shift pensions for GM retirees to the federal government, she said .
Axelrod, asked about concessions by union workers, said they have already made concessions.
"What we shouldn't do is ask the sacrifices of the workers to be disproportionate," he told Fox. "But there's no doubt that everyone who has a stake in the future of this company is going to have to make sacrifices."
[Source: By Charles Abbott, Reuters, 05Apr09]
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