GM CEO Rick Wagoner said the automaker was confident the company could restructure outside of bankruptcy, but acknowledged a pre-planned bankruptcy filing could work. “If we can accomplish 99% outside of court that we would inside of court, why in the world wouldn’t we do it outside of court? To save the risk and, by the way, at a much lower expense,” The Detroit News quoted Wagoner as saying. “If we were to have to file for Chapter 11, there is no (debtor in possession) financing other than the U.S. government — and that would be a huge — potentially huge amount of financing required.” Wagoner said restructuring out of bankruptcy court is the best option.
“I think it makes sense for everyone’s perspective to do this outside of court. We have to show we can do that though,” Wagoner said. “I think we can. I think it’s in everybody’s interest, including bondholders and the (UAW retiree health care trust fund) and others, but it’s not done yet.”
Wagoner said the company had studied a pre-packaged bankruptcy filing that could see the company emerge in 30 or 60 days “What I’ve learned is it could work and it might not work. If it doesn’t it could mean in the end a long period of bankruptcy, which I believe would result in the liquidation of the company.”
The automaker is in almost daily contact with the Obama auto team and Wagoner said it was working hard to reach agreements with the United Auto Workers and its bondholders on concessions necessary to make the automaker viable.
He said GM favored a Treasury Department-backed credit insurance program to aid suppliers, rather than a program to speed up payments. “The situation is getting more precarious,” he said of suppliers.