Updated from 12:09 p.m. EDTAs General Motors ( GM) revises its restructuring plan, a bankruptcy filing is "probable" but not preferred, CEO Fritz Henderson said Friday. "Our preference is to accomplish this outside of a bankruptcy, but I would say the overriding preference is to accomplish our goal" of restructuring quickly, Henderson said on a conference call with reporters. "It's pretty simple," he said. "If we can't accomplish it outside of bankruptcy by June 1, we will do it inside of bankruptcy." He said GM is operating on two tracks, preparing for both bankruptcy and out-of-bankruptcy operations, but the two strategies have various similarities. GM has already received $13.4 billion in government aid, and it must meet strict government requirements to cut labor costs and debt by a June 1 deadline. Henderson said additional money will be needed during the current quarter. In the closing days of the Bush administration, GM said it would need $18 million in federal loans this year, and Henderson said nothing Friday to counter the suggestion that the remaining $4.6 billion would be sought by the end of the quarter. Henderson dismissed speculation that two brands, GMC and Pontiac, could be shut down. He said GM remains committed to a "four core-brand strategy" that includes Buick, Cadillac, Chevrolet and GMC, "the bulwark of our strategy going forward." Pontiac has been slated to remain as a niche brand. "I don't always believe everything I read," Henderson said. "Our four core-brand strategy is the right way to go to market."
Commenting on April sales, Henderson repeatedly used a single word "OK," noting that "the current (sales) environment we find ourselves in is not helpful for anybody." He gave no indication that sales have begun to pick up from the minimal levels of the past six months. The best solution for GM, he said, is to quickly complete and implement the restructuring plan.
So far, he said, GM executives have focused on revising the original plan and working closely with Treasury officials. "We're taking the watch apart step by step and rebuilding it," he said. The revised plan will be "going deeper, going faster" than the one the company submitted to the Treasury Department on Feb. 17, he said. That means an unspecified number of additional job cuts will be made by June 1 "in order to get our capacity utilization higher." For the time being, the United Auto Workers union has focused on negotiations with Chrysler because it faces a May 1 deadline from the administration. In the near future, Henderson indicated, GM will become more engaged with both the union and the bondholders, both key players in potentially enabling the company to avoid bankruptcy. Regarding the bondholders, Henderson said: "They themselves would like to see what a revised business plan looks like. We've had a dialogue with them. I wouldn't say we've had lots of intense meetings." He noted, however, that given the need to revise the restructuring plan, "anything on the table (before Feb. 17) is off the table." GM shares traded Friday afternoon at $1.84, down 10 cents.