- The Washington Times - Wednesday, April 1, 2009


General Motors Corp.’s new chief executive officer said Tuesday that more of the automaker’s plants could close and bankruptcy is “more probable” as GM works to meet new, tougher requirements for government aid.

In his first news conference as CEO, Frederick A. “Fritz” Henderson said he expects the company would “need to take further measures” beyond the five plants the company said it would shutter when it submitted a restructuring plan to the government in February.

GM also is likely to offer another buyout program to workers as it looks to cut labor costs, Mr. Henderson said.

President Obama said Monday that GM’s initial plans to become viable didn’t go far enough. He gave the company 60 days to make more cuts and get more concessions from bondholders and unions or it won’t get any more government help.

The Obama administration also asked former CEO Rick Wagoner to resign, and Mr. Henderson took over as CEO on Monday.

Mr. Henderson said that although GM would prefer not to use bankruptcy protection to save itself, it is “certainly more probable” than in the past.

The company, he said, has until June 1 to accomplish changes sought by the government, or it will be in bankruptcy. The 60-day deadline should be enough time, but if it becomes evident that the changes can’t be made by the deadline, GM could go into court sooner, he said.

“It doesn’t have to take 60 days. If it’s quite clear that we’re not able to accomplish what we need to do in terms of operational restructuring, reduction of debt on the balance sheet, and what we need to do to accomplish these broad parameters of having a viable business, this will be a management judgment” reviewed by the Obama administration’s autos task force, he said.

Mr. Henderson also said GM is still talking with potential buyers of the Hummer brand, and a decision on the brand’s fate will come in the next few weeks. GM had said in a viability plan filed with the government in February that it would make the decision in the first quarter.

In an effort to increase sales, GM launched a program called “Total Confidence” that will make car payments for customers who lose their jobs through no fault of their own.

GM will make up to nine payments of $500 each to qualifying customers. Consumers must qualify for state unemployment benefits to be eligible for the program.

The program starts Wednesday and extends to April 30.

Ford Motor Co. announced a similar program Tuesday, which will take over customer’s payment of up to $700 a month for a year in the event of job loss.

Mr. Henderson has held posts at the company’s financing arm and its auto parts division and led GM operations in Latin America, Africa, the Middle East and Europe. He was named chief financial officer in 2006 and chief operating officer last year.

Mr. Wagoner, who was CEO for nearly nine years, was criticized for not moving quickly enough to restructure the bureaucratic GM. David Cole, chairman of the Center for Automotive Research, who knows both men, said Mr. Henderson will speed things up.

“Fritz, I think, is a little bit more decisive,” Mr. Cole said. “As a consequence of that, I think he can move a little bit more quickly.”

GM’s outgoing vice chairman, Robert A. Lutz, said in e-mail that Mr. Henderson “listens, discusses, cuts the talk off at the right point, decides and acts.”

In his conference call with reporters, Mr. Henderson said he will focus on cleaning up GM’s balance sheet and cutting its debt so the company can repay taxpayers.

“I don’t think you’re going to see the task force making day-to-day decisions,” Mr. Henderson said.

He told reporters that in addition to his former role to keep the company managing how it makes cars and trucks, he will move more quickly than Mr. Wagoner on the restructuring.

“It’s about doing more, doing it faster and doing whatever it takes,” he said.

But some worry the White House task force will be too involved in the company’s daily operations.

“They are going to write the plan for GM. They are going to decide what GM will look like,” said Sen. Bob Corker, Tennessee Republican, who has been critical of the auto bailout.

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