GM exec: Bankruptcy not an option

WASHINGTON (AP) – A top executive of General Motors Corp. said Wednesday bankruptcy isn’t a viable option, as the United Auto Workers braced for a decision on contract concessions to the endangered Big Three.

Fritz Henderson, president and chief operating officer of GM, said that choosing the bankruptcy route would further erode consumer confidence in the automaker and “we want them to be confident in their ability to buy our cars and trucks.”

Henderson traveled the network morning news show route on the eve of a new set of congressional hearings on some $34 billion the industry is seeking in federal assistance. At the same time, UAW leaders were immersed in intense discussions on possible givebacks for the companies at an emergency meeting in Detroit.

Under consideration were the possibility of scrapping a much-maligned jobs bank in which laid-off workers keep receiving most of their pay and postponing the automakers’ payments into a multibillion-dollar union-administered health care fund.

Henderson said that GM is ready to undertake a host of steps needed to resize. But he also said on NBC’s “Today” show that “to win, you’ve got to win with product and technology. … And we do not want to give consumers a reason not to buy our cars and trucks.”

Chrysler LLC and Ford Motor Co. — as well as GM — have ditched their corporate jets for hybrid cars and replaced vague pleas for federal help with detailed requests for as much as $34 billion in their second crack at persuading Congress to throw them a lifeline.

Henderson acknowledged Wednesday that the initial appearances by the heads of the car makers was a public relations failure.

“Yeah, it certainly was not our finest hour,” he told NBC. “We were not as clear about what we wanted to do.” He also conceded that the decision by the executives to travel to Washington by private jet “was a problem” for lawmakers.

Congressional leaders now are reviewing three separate survival plans from the three automakers as they weigh whether to call lawmakers back to Washington for a special session next week to vote on an auto bailout.

In blueprints delivered to Capitol Hill on Tuesday, GM and Chrysler said they needed an immediate infusion of government cash to last until New Year’s, and both said they could drag the entire industry down if they fail. Ford is requesting a $9 billion “standby line of credit” that it says it doesn’t expect to use unless one of the other Big Three goes belly up.

But Chrysler said it needed $7 billion by year’s end just to keep running. And GM asked for an immediate $4 billion as the first installment of a $12 billion loan, plus a $6 billion line of credit it might need if economic conditions worsen. The two painted the direst portraits to date — including the prospects of shuttered factories and massive job losses — of what could happen if Congress doesn’t quickly step in.

Democratic leaders voiced concern and a desire to do something to avert an automaker collapse, but they made no commitments about helping an industry that’s made few friends lately on Capitol Hill.

“It is my hope that we would” pass legislation to help the automakers, House Speaker Nancy Pelosi, D-Calif., said. Senate Majority Leader Harry Reid, D-Nev., said he would lay the groundwork Monday for a possible vote on an auto bailout measure.

In their first round of pleas for a government rescue last month, the Big Three executives arrived in Washington on separate private jets and enraged lawmakers who said they failed to take responsibility for their companies’ troubles or justify a federal bailout.

“I think we learned a lot from that experience,” Ford CEO Alan Mulally said.

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