Henderson Details GM Survival Plan

GM CEO Fritz Henderson has spelled out his plan to save the troubled Detroit automaker in an interview with Automotive News.

Henderson has acknowledged that the restructuring required to save the company needs to go "deeper and faster" and has laid out his plan to do so.

GM had earlier released details of how the company would be split into two divisions, with a new, leaner GM emerging with the more successful Chevrolet, Cadillac, and the Buick/GMC/Pontiac brands under one umbrella. The 3 latter brands would be coupled together in a more integrated product structure.

Henderson has also promised to speed up the restructuring of the dealer network and shrink GM's dealer numbers in concert with the downsizing of the entire company.

The Saturn, Hummer and Saab brands will be left to languish in another corporate entity, as of yet undefined, which Henderson says will not make it "easier or more difficult" for the brands than the situation they are already in. Very much leaving the impression that those brands will be either sold-off quite cheaply or shut down altogether if no buyers can be found.

Henderson has also promised to reduce GM's debt through concessions from the UAW, the union that represents auto workers, and GM bondholders who hold about 27.5 billion US dollars in unsecured company debt. Henderson has promised to scale back GM's commitments to auto worker pension and health funds and negotiate a substantial debt reduction with bondholders. GM has offered bondholders equity in GM and asked that they accept a revaluation of their holdings to a percentage of less than one third of their original bond value. Bondholders have been resistant to assuming such a huge loss on their investment, but may have no choice with GM facing bankruptcy, in which case they could stand to lose it all.

GM's total debt is well above 60 billion US dollars when including the bailout loans it has received from the US Treasury. Henderson said GM's current debt level is unsustainable.