Currently reading: GM bankruptcy 'not inevitable'
New chief executive hopes swift action will keep GM out of bankruptcy

The new chief executive of GM insists it is not inevitable the company will fall into bankruptcy.

Fritz Henderson, who became chief executive at GM a week ago when Rick Wagoner was removed by President Obama's auto task force, said: "Bankruptcy is not inevitable."

Henderson has been charged by the government with winning more concessions from bondholders and unionised workers - and GM's chances of further bailouts depend on the success of his negotiations.

He has been given 60 days to make progress, and has already said there will be more job cuts and plant closures. More than 400,000 jobs have already been cut from the US car industry over the past year.

"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 Obama, said the goal was to make GM and Chrysler viable.

"We want these to be going concerns - not wards of the state," he said.

"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."

Car sales in the US fell by 37 per cent in March, the 17th consecutive month of decline.

Add a comment…