General Motors boss hints at bankruptcy

Recently installed GM President Fritz Henderson (pictured) has admitted bankruptcy proceedings are becoming an increasing possibility for the company.

GM is struggling to manage its debt and make enough cuts to its manufacturing and dealership networks as the US Government deadline looms closer.

"I certainly think today that it's more probable that we would have to resort to a bankruptcy process," Henderson told journalists on Monday.

In order to avoid bankruptcy GM would have to convince creditors to accept 10 cents in the dollar for the US$27billion of unsecured debt currently hanging over its head, as well as negotiating new deals with the powerful workers union and slash its workforce and thousands of dealers.

The US Government is rumoured to consider a 'surgical' bankruptcy is a viable option for the firm. President Barack Obama has given GM until the end of this month to resolve its problems or face the prospect of losing federal support.

It is hoped a surgical bankruptcy could be undertaken within two months, leaving the new General Motors a chance to re-establish itself without damaging the brand permanently. Cross town rivals Chrysler have already began Chapter 11 bankruptcy proceedings and formed an alliance with the Fiat Group.

On a bright note for Holden, Henderson went on to say that even if General Motors' North American operation files for bankruptcy it doesn't mean the rest of the company's global operations will follow

 "At this point, the analysis is still being done country-by-country," Henderson said.

GM has already announced it will close the long-running Pontiac brand, and it is trying to sell its Hummer, Saturn, Saab and Opel brands. Henderson also admitted that the company is willing to sell its Delaware factory that builds the Pontiac Solstice, Saturn Sky and Opel GT sports cars if a buyer comes forward.

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