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GM Chairman Kresa backs "good" GM, "bad" GM bankruptcy scenario

If General Motors is artificial into bankruptcy, then a master that allows the companionship to disjoin assets into a "good" GM and a "bad" GM would be "a big idea," says companionship Chairman Kent Kresa.

In an appointment today, Kresa told Automotive News that he quiet thinks the automaker can restructure itself successfully without entering Chapter 11 bankruptcy proceedings.

But if creditors don"t forgiveness bit of GM"s debt, this good-bad close by would acknowledge GM to reorganize and manner exterior bankruptcy more quickly.

The good-GM/bad-GM plan is "a extremely agreeable technique," Kresa said. "It has its problems, and all of our people are looking at it extremely hard. But in concept, it is a agreeable manner to acknowledge a new General Motors to emerge."

Good assets, representing example, power embody the Chevrolet and Cadillac brands as the centre of a smaller, more sustainable company. Bad assets extremely likely would embody GM"s big debt, and borderline brands.

"There are a collection of constituents just at current that be obsessed some dibs on the assets," Kresa said. "The bankruptcy has to deal with each of those and build certain that whatever comes exterior is reasonable. This is not a done deal. We desire to do something that would be done quickly.

"The query is, is that the quickest manner to do it? And we"re looking at that."

Kresa has been a GM board colleague since 2003 and has served on the investor committee, which managed GM"s benefit funds. He was also chairman and CEO of defense contractor Northrop Grumman Corp. from 1990 to 2003.

Kresa"s remarks reverberation those of GM CEO Fritz Henderson, who said Tuesday that he is prepared to grip the companionship into bankruptcy if he fails to come in concessions from bondholders and the UAW.

Bondholders be obsessed been unwilling to eat concessions that would neat GM"s accountability from $27 billion down to $9 billion or so. Likewise, the uniting has been unwilling to acknowledge GM to cut back currency contributions to the UAW retiree condition anxiety furnish until bondholders cut back the company"s debt.

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