22 May 2009

Restructuring Plan Is Left To GM

Story from Reuters

WASHINGTON, May 20 (Reuters) - The Obama administration has no plans to dictate to General Motors Corp (GM.N) specifics on dealer cuts, vehicle production or what plants to close as part of its restructuring, U.S. Treasury Secretary Timothy Geithner said on Wednesday.

"We are trying very carefully not to be involved in those decisions," Geithner told the Senate Banking Committee about government oversight of operations at GM and bankrupt Chrysler LLC.

"We think those are the decisions for the board and management of these companies," Geithner said, adding that the administration's goal is to ensure restructuring that results in a viable industry.

A White House/Treasury task force is overseeing the restructuring of GM and Chrysler LLC, which sought Chapter 11 protection on April 30.

Chrysler plans to emerge from bankruptcy under management control of Italy's Fiat SpA (FIA.MI).

GM faces a June 1 task force deadline to win steep concessions from debtholders and labor and show the government it can survive on its own.

Failure on either front would prompt bankruptcy, a step GM has said is probable.

The automaker is currently locked in negotiations with the United Auto Workers on plans to close 16 factories, cut 21,000 jobs and shift some vehicle production to China, Mexico, Korea and Japan.

The union objects to the plan, which GM Chief Executive Fritz Henderson has said is open to negotiation. Henderson was in Washington earlier this week for talks with UAW President Ron Gettelfinger.

The UAW has asked the White House and Congress to intervene with GM on the production plan.

Lawmakers with at-risk facilities in their states or districts have met with Henderson and pressed the task force to minimize job losses.

The task force must sign off on any GM business plan since the company now depends on federal bailouts. GM has received $15.4 billion in emergency government loans since January.

Both GM and Chrysler have unveiled plans to cut more than 2,300 dealerships combined and drop unprofitable brands.

No comments: