If General Motors does not receive federal bailout money, the company's CEO says he would be reluctant to file for a pre-packaged bankruptcy that would allow the company to downsize now and negotiate with lenders before declaring Chapter 11.
"You can't dismiss any options, but it is my view that that is a highly risky strategy," Rick Wagoner told NPR's Michele Norris.
"We really hope that the process we're going through now will result in confidence enough to provide some funding support that would enable us to do a lot of the good things — as far as restructuring the business that we've indicated in our plan that we would do, without the massive risk to the economy, the auto sector and the company itself that a bankruptcy filing, in our view, would bring," he said.
Wagoner, along with Detroit's other two big auto manufacturers, came to Washington, D.C., on Thursday to ask the Senate Banking Committee for $34 billion in bailout money to prop up the failing American auto industry. Wagoner told Norris that his company needs up to $4 billion by the end of this month.
During his testimony, Wagoner said that GM would pay back the loan in full by 2012 and highlighted the company's other cost-cutting measures, including his own reduced compensation. He told Norris that he had accepted a salary of $1 a year, with no cash bonus.
"I said that I would work for a dollar," he said. "Hopefully, if the company meets its turnaround objectives, I'll have the chance to get some additional compensation," he said.
When asked how General Motors found itself in this position — and what mistakes Wagoner personally made to contribute to the company's woes — he talked about the company's slow moves to develop more fuel efficient vehicles such as the electric car.
"The spike up and down in oil prices really got us focused that we need to stay on fuel economy as a day-to-day thing," he said. "It's just a critical requirement. Even if oil prices are lower, we have to stay on it as a long-term objective."