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    05 April 2009

    GM’s Chief Says Company, Stakeholders Need to Do More

    NEW YORK. General Motors Corp. Chief Executive Officer Fritz Henderson said the company and its stakeholders still need to do more as the automaker strives to meet a deadline for restructuring, in or out of bankruptcy.

    “The company still needs to pull together our people, our suppliers, our dealers, management executives, everyone, bondholders, retirees,” Henderson said in a recorded interview for CNN’s “State of the Union” program.

    “We need to go further and I think at this point it would be inappropriate for me to try to guess what that might be,” Henderson, 50, said, according to a transcript of the program released by CNN. “If the conclusion is you’ve got to go deeper and you’ve got to go faster, you can’t really afford to take anything off the table.”

    Henderson said he still favors restructuring the company outside of bankruptcy. In a separate interview on NBC’s “Meet the Press” program, he said bankruptcy isn’t inevitable.

    ”It would only be prudent” to be prepared for all contingencies, he added, so “we can move fast.”

    New Plan

    GM, the largest U.S. carmaker, is trying to craft a new strategy for financial viability that cuts debt and boosts cash flow, probably by eliminating more jobs and closing additional plants. The U.S. government ordered the company to come up with a plan by June 1 to justify taxpayer aid that is keeping GM alive.

    David Axelrod, a senior adviser to President Barack Obama, said GM workers shouldn’t have to make “disproportionate” concessions. Speaking on “Fox News Sunday,” Axelrod said the United Auto Workers union has taken “huge concessions” already and that creditors and company executives must do the same.

    “What we shouldn’t do is ask that sacrifices of the workers be disproportionate,” he said.

    Henderson was chosen by the Obama administration to run GM after officials asked CEO Rick Wagoner to step down March 27. The administration also wants a majority of the 11-member board changed. The automaker’s acting chairman, Kent Kresa, said March 31 he wants to present six new candidates by August.

    GM Debt

    GM must shrink $27.5 billion in debt that bondholders have been reluctant to exchange for equity, and $20.4 billion in obligations to a union-run health-care fund. Henderson also has said GM needs to cut more deeply than its planned 22 percent reduction in so-called structural costs in North America to $26.3 billion from 2007’s level.

    Current GM plans, before any overhaul, call for eliminating 47,000 jobs globally, idling 5 assembly plants in the U.S. and shedding thousands of dealers.

    GM has received $13.4 billion in U.S. loans and asked for as much as $16.6 billion more when it submitted the Feb. 17 viability plan the government rejected.

    Chrysler LLC borrowed $4 billion and the administration is considering as much as $6 billion in additional aid for the Auburn Hills, Michigan-based automaker, if it forms an alliance with Italy’s Fiat SpA. In 1980, then-Chrysler Corp. borrowed $1.2 billion in government-backed loans it repaid in 1983.

    Ford Motor Co., the second-largest U.S. automaker, is not seeking government support.

    A softening U.S. economy that is shedding jobs amid low consumer confidence adds to GM’s difficulties. U.S. auto sales tumbled 37 percent in March, and GM’s slid 45 percent.

    New autos sold in March at an annual rate of 9.86 million units, according to sales tracker Autodata Corp. of Woodcliff Lake, New Jersey. The rate averaged 16.8 million this decade through 2007.

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