GM chief warns of threat to suppliers

Source: Agencies  |   2009-6-27  |     NEWSPAPER EDITION

GENERAL Motors Corp needs to exit from bankruptcy quickly in order to avoid a "fatal" blow to many of its suppliers and the loss of thousands of jobs, Chief Executive Fritz Henderson said in a court filing on Thursday.

"Many of GM's suppliers are already in the midst of a severe liquidity crisis, which has only been exacerbated by the current shutdown of certain GM production facilities," Henderson said.

GM has shut 13 of its assembly plants in the United States for up to 11 weeks in some cases as part of a bid to cut production and run down inventory as it reorganizes.

Henderson said tentative plans to resume operations at some GM plants by July 13 could be endangered if the court does not approve GM's sale of its best assets out of bankruptcy in a deal brokered by the Obama administration's autos task force and funded by the US Treasury.

"If new GM is not able promptly to commence operations, many of GM's suppliers will have further draconian reductions in revenue and no income," Henderson said.

That could force suppliers "to shut down their respective operations, perhaps permanently, and thereby thousands of jobs."

GM, which filed for bankruptcy on June 1, is seeking bankruptcy court approval to sell its best assets to a reorganized company funded by the US Treasury.

Judge Robert Gerber of the federal bankruptcy court in Manhattan has scheduled a June 30 hearing on the proposed sale.