It’s becoming more and more apparent that General Motors sees the writing on the wall:
DETROIT — General Motors stated in a regulatory filing to the Treasury Department on Thursday that it is prepared to file for bankruptcy protection if it cannot restructure out of court.
It echoes what G.M.’s new chief executive, Fritz Henderson, said this week, but marks the first time G.M. has officially disclosed to President Obama’s auto task force that it was willing to consider such a step.
In the progress report included in the regulatory filing , G.M. said it continued to “strongly believe” that an out-of-court restructuring would be the “highest value outcome” for its customers and the United States.
“However, if the changes needed for long-term restructuring cannot be obtained out of court, the company is prepared and would consider in-court options,” the company said.
It said that possibility “would be enhanced” by the Obama administration’s recent pledge to guarantee warranties on G.M. vehicles, and to “provide support for a rapid emergence from any in-court process.”
In its revitalization plan filed with the Treasury Department on Feb. 17, G.M. insisted that the risks of a Chapter 11 filing “outweigh the benefits of a bankruptcy based approach” to a restructuring.
But on Monday, President Obama said the Feb. 17 plan was not sufficient, and said G.M. would have to seek bankruptcy protection if it did not take rapid steps to significantly reduce its $63 billion in debt. The government set a June 1 deadline for G.M. to complete its work.
Of course, one wishes they’d seen the light before we dumped $ 14 billion into them.
