This just in from Reuters:
CHICAGO (Reuters) – General Motors Corp, nearing a Tuesday deadline
to present a viability plan to the U.S. government, is considering as
one option a Chapter 11 bankruptcy filing that would create a new
company, the Wall Street Journal said in its Saturday edition.
“One plan includes a Chapter 11 filing that would assemble all of
GM’s viable assets, including some U.S. brands and international
operations, into a new company,” the newspaper said. “The undesirable
assets would be liquidated or sold under protection of a bankruptcy
court. Contracts with bondholders, unions, dealers and suppliers would
also be reworked.”
Citing “people familiar with the matter,” the story said that GM
could also ask for additional government funds to stave off a
bankruptcy filing.
GM declined to comment, the story said.
General Motors and Chrysler LLC face a Tuesday deadline to file
restructuring plans to the government in exchange for receiving $17.4
billion in federal loans.
Automakers have struggled as U.S. auto sales have tumbled amid a
recessionary economy. U.S. auto sales in January tumbled to a 27-year
low.
GM has been in talks with bondholders and the United Auto Workers
union to get an agreement on a restructuring that would wipe out about
$28 billion in debt for the auto maker, sources have told Reuters.
However, it appears unlikely a deal could be reached by the Tuesday
deadline, they said.
GM has already announced plans to cut 10,000 salaried workers
worldwide, or 14 percent of its staff, impose pay cuts for most
remaining white-collar U.S. workers and has offered buyouts to its
62,000 U.S. workers represented by the UAW.
In addition, it is trying to sell its Hummer SUV and Swedish Saab brands and is reviewing the status of its Saturn brand.
(Editing by Eric Walsh)
