GM CEO: Bankruptcy May "Be Best Solution"

Sunday, Apr 5, 2009  |  Updated 6:54 PM PDT
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The administration forced out Rick Wagoner as chief executive; Henderson took over on March 29.

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General Motors Corp. is softening its opposition to bankruptcy reorganization a little more.

"If it's required, that's what we'll do," new Chief Executive Fritz Henderson said in an interview broadcast Sunday, but noted that GM still would prefer to avoid bankruptcy protection while restructuring.

President Barack Obama and his auto industry task force have indicated that bankruptcy protection "may very well be the best solution for the company to achieve these goals," Henderson told CNN's "State of the Union."

That is why, he said, "when you look at the situation, we said, 'OK, we'll spend the time to try to complete the work, more aggressive work, outside of the court process, but if it's required, that's what we'll do.'"

Obama had said GM's initial plans to become viable didn't go far enough. Last week, he told the company it had 60 days to make more cuts and get more concessions from bondholders and unions, or it won't get any more government help.

The administration also forced out Rick Wagoner as chief executive; Henderson took over on March 29.

Henderson said the government's guarantee of GM warranties and its indication that it would lend money to the automaker while it reorganized under bankruptcy protection are both "strong signals which say even if we have to go through bankruptcy, the company's going to be there."

He told NBC's "Meet the Press" that GM needs to "go deeper and we need to go faster" in its restructuring.

"We either accomplish this job outside of bankruptcy in the short term, or alternatively, if it's necessary, we'll go into bankruptcy in order to get this job done," he said.

Treasury Secretary Timothy Geithner, asked on CBS' "Face the Nation" Sunday if he agreed with Henderson that bankruptcy is a possibility, said several options "could work."

"Our test is, what's going to work," he said. "What's going to help bring about the kind of restructuring, allow them to emerge stronger and be part of this American economy. We want them to be part of our future."

Henderson also said he does not believe the administration should encourage Americans to buy U.S.-made cars.

"I think the consumer should buy exactly what kind of car they think meets their needs and that excites them," he said on "Meet the Press." ''And it's our job to make sure we provide that and as I look at it, not necessarily have it mandated or otherwise encouraged."

Also, Henderson said that unlike Wagoner, he will not work for $1 a year. He is paid $1.3 million, a salary which was cut 30 percent as part of what he called shared sacrifices at the auto maker.

The Detroit automaker said in February it was aiming to shrink U.S. employment to 72,000 by 2012, down from 92,000 hourly and salaried employees at the end of last year. Henderson said the auto task force concluded the company needed to cut more, and faster.

That conclusion is "certainly going to require us to be leaner than we had even foreseen in February," he said. The numbers haven't been finalized, but they would amount to a "significant additional change for the company," he said.

Henderson is aiming to minimize the amount of time GM relies on taxpayer money.

"One of the saddest days of my career was when we needed to borrow money from the U.S. taxpayer," he said. "And I'm quite convinced that one of the happiest days of my career is when we repay it."

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