New GM CEO Says More Cuts Coming

The new head of General Motors Corp. said Tuesday the company may need to shutter more plants, launch a new buyout program for workers and extract deeper concessions from the company's union and bondholders to survive.

Fritz Henderson, installed Monday as interim CEO, said the company could reach the goals set by President Barack Obama's auto task force ahead of a June 1 deadline. GM, he said, remained focused on restructuring out of court and understood the tasks needed to avoid a "quick rinse" bankruptcy.

He acknowledged that a bankruptcy, while not the preferred option, has become a "more probable" outcome for the auto maker.

"They asked me to do the job to make General Motors successful and I will do that, whatever it takes," Mr. Henderson said. "We will get the job done, and we will do it in court or out of court."

Mr. Henderson told reporters that GM had made "a good downpayment" on a new restructuring plan after the task force said Monday its existing efforts were insufficient and turned down a request for fresh loans.

The stepped-up restructuring will likely include another program to usher out hourly workers, which would be the fourth such move since 2006. Mr. Henderson said more plant closings are also a possibility beyond plans to close 14 factories by 2012.

The government will provide GM with working capital until June 1 as it develops the plan and tries to thrash out deals with unions, creditors and other stakeholders. Mr. Henderson said the government didn't specify how much money it would extend to GM, but that it would be enough to keep the business running until June.

http://online.wsj.com/article/SB123850236944873521.html

This is really not a good situation for GM..