Accessibility links

Reports: GM Preparing for Possible Bankruptcy


Officials at the top U.S. automaker are said to be preparing for a possible bankruptcy.

Media reports from Bloomberg and Reuters say General Motors is speeding up preparations for a bankruptcy filing that would split the auto giant into two companies.

The unnamed sources say the first company would be made up of GM's most successful units, while less profitable parts of the operation would be grouped into a second company.

Earlier this week, GM Chief Executive Fritz Henderson told U.S. television on NBC's Meet the Press that while he preferred to restructure the company with government help, if bankruptcy was the only option "we're going to do it fast."

Researchers and U.S. lawmakers worry GM's potential collapse could spark a series of failures in related industries.

In the meantime, the vice chairman of the number three U.S. automaker says he is optimistic about his company's chances for survival.

Like GM, Chrysler has been the recipient of billions of dollars in government bailout money, but Jim Press downplayed the possibility the company could be forced into bankruptcy while talking to reporters at the New York Auto Show, saying it was "business as usual."

The government has given Chrysler until the end of the month to complete a merger with Italian automaker Fiat. Press says that gives Chrysler ample time to complete the deal.

Also Wednesday, the U.S. Treasury Department says it has finalized a plan to help companies that supply the auto giants with parts and materials.

The program will offer auto suppliers short-term financing backed by up to $5 billion in government funds.

A Treasury Department spokeswoman, Jenni Engebreston, says the effort will help stabilize a sector of the economy that employs more than 500,000 people.

XS
SM
MD
LG