President Barack Obama has determined that a prepackaged bankruptcy is the best way for General Motors Corp. to restructure and become a competitive automaker, people familiar with the matter said.
Obama also is prepared to let Chrysler LLC go bankrupt and be sold off piecemeal if the third-largest U.S. automaker can’t form an alliance with Fiat Spa, said members of Congress who have been briefed on the subject and two other people familiar with the administration’s deliberations.
While Obama two days ago gave GM 60 days to come up with deeper cost and debt reductions than the biggest U.S. automaker proposed in a viability plan submitted last month, the “quick and surgical” bankruptcy his administration described as an option appears to be inevitable, the people said. Obama personally signed off on asking GM Chief Executive Officer Rick Wagoner to step down, as he did on March 29, they said.
“Our focus is on accelerating the speed of our operational restructuring and reducing liabilities and debt on the balance sheet,” GM spokeswoman Renee Rashid-Merem said in an e-mail. “GM will take whatever steps are necessary to successfully restructure our company.”
Now if he only got religion about the banks . . .
Obama Said to Conclude Bankruptcy Best Option for GM, Chrysler
Bloomberg, March 31 2009