GM CEO: Bankruptcy is avoidable

Tuesday, May 5, 2009

DETROIT -- With a month left to finish a list of restructuring moves, General Motors Corp.'s new chief executive officer said it's still possible the company can finish everything and avoid following Chrysler into bankruptcy.

But don't think Fritz Henderson, who took over the automaker when Rick Wagoner was ousted by the Obama administration, is ignoring what's going on with Chrysler LLC in front of a U.S. Bankruptcy Court judge in New York.

"I think it's still possible that we stay out of bankruptcy," Henderson said Monday. "Our preference is to accomplish our goals outside of the bankruptcy process. But if we're going to go through one, then we're going to learn from Chrysler's experience."

Henderson also said a counteroffer from the company's bondholders made last week is unacceptable because it doesn't meet requirements imposed by the government.

A key issue for GM is getting 90 percent of its bondholders to accept a debt-exchange offer. GM is offering them a 10 percent stake in the company if they give up $27 billion in unsecured debt, but the bondholders have counteroffered seeking a 58 percent ownership stake.

Henderson essentially rejected the counteroffer, saying GM can't do it because it has been told by the Treasury Department that it can't give more than 10 percent equity to the bondholders.

"It's outside of what the Treasury has told us they would support," he said. "It's about as factual as I can be."

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