GM's New CEO: Bankruptcy May Be Best Option for Automaker - Automotive * US * News * Story - CNBC.com

New GM CEO: Bankruptcy May Be Best Option for Automaker

By: CNBC.com with Reuters and AP | 30 Mar 2009 | 05:02 PM ET

General Motors's new chief executive told CNBC that filing for Bankruptcy may be the best option for the struggling automaker.

In a taped interview to be aired tonight on NBC Nightly News, Fritz Henderson said that because of greater demands from the Obama administration to restructure, GM is considering the bankruptcy option. The auto giant previously had ruled out such a move, saying it would discourage people from buying GM cars.

Henderson's comments came after President Obama bluntly rejected turnaround plans by GM and Chrysler and demanded that both companies make fresh concessions in order to get more federal aid.

Henderson, who was GM's president and chief operating officer, was named the new CEO after the government forced the resignation of CEO Rick Wagoner on Sunday. GM's board is also being restructured.

Henderson told reporters that the company would still prefer to restructure outside of court, but the level of support Washington is offering would help the company quickly restructure through bankruptcy.

Henderson says GM needs to work faster and go deeper to get more concessions from bondholders and the United Auto Workers union. President Obama has demanded that GM come up with a better restructuring plan in 60 days in order to qualify for more government aid.

Chrysler, which owned by private equity Cerberus Capital Management, was given 30 days to complete an alliance with Fiat or be cut off from US government funding. Chrysler was deemed to be not viable as a stand-alone company.

Obama also took the extraordinary step of announcing the government will back new car warranties issued by both GM and Chrysler, an attempt to reassure consumers their U.S.-made purchases will be protected even if the companies don't survive.

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