General Motors Corp., operating in bankruptcy since June 1, is consulting daily with President Barack Obama's auto task force on plans to sell the company's best assets, Chief Executive Officer Fritz Henderson said.
Henderson, who met today in Detroit with Edward Whitacre Jr., GM's next chairman, also said the automaker appears ready to meet the bankruptcy court's timetable to exit Chapter 11. GM is preparing for a June 30 hearing on the sale of assets such as its Chevrolet, Cadillac and Buick brands to a new, government- backed company.
Selling those brands will separate the valuable parts of GM from assets such as unwanted dealer contracts, allowing a new automaker to be operating by the end of August. Chrysler LLC sold its best assets to a group led by Fiat SpA on June 10 to create Chrysler Group LLC in the same type of court process.
"Our involvement with the task force is almost every day," said Henderson. "It's been about getting GM restructured."
Obama automotive advisers Steven Rattner and Ronald Bloom were also in Detroit. Whitacre is the former AT&T Inc. CEO who has agreed to serve as GM's chairman after bankruptcy.
"We come to town regularly to meet with company officials," Rattner said in an interview yesterday, declining to answer other questions. He said today that GM would exit bankruptcy "very soon." Bloom wouldn't discuss GM.
Henderson said he and Whitacre spoke about GM and the automotive business in general.
'Diving Right In'
"Obviously his first task is to complete the naming of the other board members," Henderson said. "I think he's going to provide perspectives that I'm looking forward to. He's diving right in."
The company, which lost almost $88 billion since 2004, has announced plans to permanently close 11 plants and is in the process of trimming its dealer franchises to as few as 3,500 retail outlets by the end of next year from about 6,000 now. GM will leave the holdings it no longer wants, including most of the factories being closed, in bankruptcy for liquidation.
GM will retain four plants it had planned to close, putting them on so-called standby status in case the North American auto-sales market accelerates faster than anticipated and it needs more capacity. The automaker has said it plans to assemble a small car at one of the factories.
Assembly Plants
Henderson said GM will choose among assembly plants in Orion Township, Michigan; Spring Hill, Tennessee; and Janesville, Wisconsin, for the new subcompact that once was to be made in China. The other standby plant is a stamping facility in Pontiac, Michigan.
The new GM will keep the Chevrolet, Cadillac, Buick and GMC brands, while the automaker's other U.S. marques will be eliminated or sold out of the bankruptcy process.
GM has preliminary agreements to sell its Saturn division to car-dealer chain Penske Automotive Group Inc., the Hummer brand of SUVs to Sichuan Tengzhong Heavy Industrial Machinery Co. and Sweden's Saab to luxury sports-car maker Koenigsegg Automotive AB. Pontiac is being dropped.
U.S. auto sales have been improving since March, Henderson said, after earlier concerns that consumers wouldn't buy vehicles from a bankrupt automaker.
"May sales were better than April sales, April sales were better than March sales, and right now, at least in terms of retail, June sales are moving along just fine," Henderson said. "So we've reassured customers we're open for business."
