GM Prepares the Way Towards Chapter 11

Recent reports about GM's struggle (or should we say surrender) with the automotive crisis emphasize even more a grim possibility for all those involved. The company seems to head for Chapter 11 and its new CEO does nothing more, at least at first glance, than to ease the way towards that goal. GM still would rather avoid bankruptcy, but as Fritz Henderson said in an interview quoted by theautochannel.com, "If it's required, that's what we'll do".

"We either accomplish this job outside of bankruptcy in the short term, or alternatively, if it's necessary, we'll go into bankruptcy in order to get this job done," GM's new CEO said, stressing Obama's demands of a "more aggressive work".

To calm down the scared voices of involved parties, especially the auto suppliers, Timothy Geithner, US Treasury Secretary said on CBS' "Face the Nation" that bankruptcy is a possibility. "Our test is, what's going to work," he said. "What's going to help bring about the kind of restructuring, allow them to emerge stronger and be part of this American economy. We want them to be part of our future."

In an odd display of "thank you for your help" gratitude, Henderson added that "one of the saddest days of my career was when we needed to borrow money from the U.S. taxpayer. And I'm quite convinced that one of the happiest days of my career is when we repay it."

The 60-day window for GM to come up with a new plan might mean exactly a Chapter 11 filling. The decision made by the Obama administration last week, besides being praised by the company's press releases, seem to have had no effect in terms of actions being taken. It is this state of apparent hibernation and the continuing "Chapter 11 might be good" statements that point to a grater than likely bankruptcy course of action.