Fritz Henderson, interim chief executive of General Motors Corp. (GM), said Monday that U.S. government aid could smooth bankruptcy despite its clear preference to restructure out of court.
Henderson also said that GM expects to draw further U.S. government loans in April. His comments came hours after the U.S. government officially turned down its request for additional aid.
The White House auto task force said it will provide GM with working capital after giving it 60 days to come up with a viable restructuring plan.
"We would prefer to do this out of court," Henderson told reporters on a conference call.
Henderson, promoted from chief operating officer at the behest of the U.S. auto task force, said GM is prepared to seek deals from stakeholders through a court-appointed bankruptcy if necessary.
The GM veteran replaced longtime CEO Rick Wagoner after GM failed to meet the conditions for the government's bailout plan and saw its own proposals deemed as unviable.
"There are ways to do this out of court, but we're getting ready to do in court if necessary," he said.
GM still has to secure a debt-equity exchange with creditors as well as agreements with unions that would make labor costs competitive with overseas auto makers' U.S. operations.
"It is clear to us we need to have significantly less debt," he said.
Henderson said while GM preferred to avoid a court process, U.S. government pledges to guarantee vehicle warranties would ease the process by giving customers more reassurance.
GM's sales fell more than 50% in February, worse than the industry average, as the company was hit by weakened customer finance options and consumer concerns about its long-term future.
Henderson also said GM was ahead of its internal cost-cutting targets, and noted that the auto task force isn't interested in taking on the company's day- to-day operations.
