General Motors ( GM) inched closer to a bankruptcy filing Tuesday as new CEO Fritz Henderson embraced the concept more readily than predecessor Rich Wagoner ever had. "We will get the job done," Henderson told reporters gathered in Detroit and online. "We will either do it out of court or we will do it in court." On Monday, Henderson replaced Wagoner, who was forced to resign by the Obama administration's automotive task force. Not surprisingly, Henderson fully backed the task force's findings that the viability plan GM submitted in February was inadequate and that the company may need bankruptcy protection to reduce its debt sufficiently. A filing depends on whether the company can gain sufficient concessions from bondholders, the United Auto Workers, suppliers and others by a June 1 deadline. "Our preference continues to be to use the 60-day period to accomplish this," Henderson said. However, if GM goes to bankruptcy, "We could do that quickly, go in and get out, as opposed to a lengthy process." The government would provide debtor-in-possession financing during the court process, he said. It is already guaranteeing GM warranties in an effort to ensure that buyers are not scared off by bankruptcy talk. GM shares were down 32 cents to $2.38 at midday, after falling 25% on Monday. Meanwhile, Ford ( F) was down 7 cents to $2.69. Henderson said GM may need to close more plants as it seeks to comply with task force findings in four key areas: It must cut costs more deeply. It must clean up its balance sheet, reducing debt obligations for retiree health care and pensions and to bondholders. It must further reduce operations. And it must improve the product mix to maximize revenue. "Historically, we've relied too heavily on pickups and SUVs," he said.
The task force sent a "clear message (that) in their judgment our viability plan was not adequate," he said. "They recognized the efforts that have been extended to this point, that have been achieved, but the view is we need to do more and we need to do it faster. We understand exactly what that means." He said the company's goal of reducing operating costs to $26.3 billion in 2009 is insufficient, which means that savings targeted for future years -- including savings from having fewer dealers -- must occur sooner. Henderson called Wagoner "a fantastic guy, a friend, a mentor" and said "it's been a pretty sad period for GM people, the last weekend." The 25-year GM veteran said he is a Detroit native, and "I understand how people feel: I understand the fear people have." He said he does not know if he will remain as CEO after the restructuring is completed. "I don't really worry much about that," he said. The company's two constituencies, the board and the U.S. Treasury, "have asked me to do the job (so) we'll get the job done." While Henderson said he opposes a bankruptcy filing, he noted: "If I didn't want to be part of a bankruptcy, if we had to do that, I would have just said, 'No, I don't want to be part of it.' " As for the task force's role, Henderson noted: "They're not interested in running the company." However, he is in regular contact, providing updates on progress and funding needs. Additionally, he expects changes in the GM board to be made at the company's annual meeting in August, given that some directors are evaluating whether to seek re-election.