Published on ShanghaiDaily.com (http://www.shanghaidaily.com/)
http://www.shanghaidaily.com/sp/article/2008/200811/20081124/article_381784.htm
GM sees bankruptcy no cure to money woes
Created: 2008-11-24 0:40:20
Author:Tom Krisher
GENERAL Motors Corp's board of directors does not consider bankruptcy protection a viable option to solve the company's financial troubles, but it has discussed Chapter 11 because it has a legal duty to do so, a spokesman said on Saturday in the wake of a media report saying that the auto maker's board weighed a bankruptcy option.
The board of directors of embattled United States auto maker GM is considering "all options," including bankruptcy, according to a report on the Wall Street Journal's Website late on Friday.
Century-old GM, an icon of American manufacturing, has been battered by a plunge in car sales as American consumers tighten their belts and shift away from the big moneymaking pickup trucks and sport-utility vehicles that have long been the staples of GM's lineup.
GM, which has slashed jobs and closed plants since early in the decade, has warned that it could run low on cash by the end of the year unless it gets a taxpayer-funded rescue from the government.
"The board has a responsibility to keep all options open considering the circumstances," said Vice President of Communications Tony Cervone. "Chapter 11 protection is not a viable option because it doesn't fundamentally address the issues at hand."
The board, which has been meeting regularly by teleconference since the company's finances worsened, agrees with Chairman and CEO Rick Wagoner that bankruptcy would be disastrous for the company, Cervone said.
Wagoner has said it would scare away customers who would not make a big-ticket purchase from an auto maker that is under court protection.
Instead, Cervone said the board supports Wagoner's strategy to seek congressional approval of low-interest government loans, getting the company through its liquidity problems until the US auto market recovers and it can be profitable again, Cervone said. "The board continues to support management and has continued to express support for management," he said.
Wagoner, in testimony to the Senate Banking Committee last Tuesday, said independent research shows 80 percent of consumers would not buy a car from GM if it were in bankruptcy.
Bankruptcy experts say the company may not be able to pay all its bills, and that some parts suppliers may start demanding cash from GM upon delivery. Wagoner, Ford Motor Co CEO Alan Mulally and Chrysler LLC CEO Robert Nardelli appeared before Congress last week seeking US$25 billion in low-interest loans but were criticized by members of House and Senate committees.
The board of directors of embattled United States auto maker GM is considering "all options," including bankruptcy, according to a report on the Wall Street Journal's Website late on Friday.
Century-old GM, an icon of American manufacturing, has been battered by a plunge in car sales as American consumers tighten their belts and shift away from the big moneymaking pickup trucks and sport-utility vehicles that have long been the staples of GM's lineup.
GM, which has slashed jobs and closed plants since early in the decade, has warned that it could run low on cash by the end of the year unless it gets a taxpayer-funded rescue from the government.
"The board has a responsibility to keep all options open considering the circumstances," said Vice President of Communications Tony Cervone. "Chapter 11 protection is not a viable option because it doesn't fundamentally address the issues at hand."
The board, which has been meeting regularly by teleconference since the company's finances worsened, agrees with Chairman and CEO Rick Wagoner that bankruptcy would be disastrous for the company, Cervone said.
Wagoner has said it would scare away customers who would not make a big-ticket purchase from an auto maker that is under court protection.
Instead, Cervone said the board supports Wagoner's strategy to seek congressional approval of low-interest government loans, getting the company through its liquidity problems until the US auto market recovers and it can be profitable again, Cervone said. "The board continues to support management and has continued to express support for management," he said.
Wagoner, in testimony to the Senate Banking Committee last Tuesday, said independent research shows 80 percent of consumers would not buy a car from GM if it were in bankruptcy.
Bankruptcy experts say the company may not be able to pay all its bills, and that some parts suppliers may start demanding cash from GM upon delivery. Wagoner, Ford Motor Co CEO Alan Mulally and Chrysler LLC CEO Robert Nardelli appeared before Congress last week seeking US$25 billion in low-interest loans but were criticized by members of House and Senate committees.
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