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| Bankruptcy filing an option with GM board, says report |
| Press Trust Of India / New York Nov 23, 2008, 00:33 IST |
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Members of General Motors’ board of directors are willing to consider “all options” for the auto maker, including bankruptcy filing, a stance that differs from that of Chairman and Chief Executive Rick Wagoner, a media report said quoting people familiar with the matter.
As part of his push to win a federal bailout for the company, Wagoner told Congress this week that the GM management believes bankruptcy protection is not a viable option for the company. Instead, GM is focusing on persuading lawmakers to provide financial help, Wagoner said.
But the Journal said the board, which in the past has publicly offered Wagoner its strong support, agrees that seeking government funding is the company's top priority. But it isn't willing to dismiss the possibility of a bankruptcy filing, the The Wall Street Journal added, citing people familiar with the thinking of the board's outside directors.
In a statement provided to the paper on Friday, GM said the board had discussed bankruptcy but didn't view it as a “viable solution to the company's liquidity problems”. The board “is committed to considering all options in light of circumstances as they may develop”.
GM spokesman Tony Cervone told the financial daily that the management is considering doing everything in its power to avoid a filing.
Wagoner declined to be interviewed, the paper said, adding that several of GM's board members could not be reached for comment on Friday. It is unclear whether the board has hired independent advisers to help it evaluate options it may have to consider. New signs of tension in the boardroom could complicate the next few weeks for 55-year-old Wagoner, the Journal said.
In the past month, he has had to acknowledge that GM is using cash at an alarming rate. Wagoner said that as soon as January, amid frozen credit markets and a collapse in demand for automobiles, the company could fall short of the minimum levels it needs to stay out of bankruptcy court. On Friday, GM shares closed at $3.06, up 18 cents, or 6.25 per cent.
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