GM Chairman Kresa Discusses Bankruptcy

Kent Kresa, who was recently promoted to GM’s Chairman of the board position when Rick Wagoner resigned, said this week that if the automaker is forced into bankruptcy, dividing assets into a “good” GM and a “bad” GM may allow it to emerge from reorganization quickly.

In an interview yesterday, Kresa told Automotive News that GM can still restructure itself without entering bankruptcy. However, if bankruptcy becomes the only solution, Kresa says a good-bad approach could allow a swift exit from bankruptcy.

In what is being dubbed the “good-bad model”, GM would enter bankruptcy and emerge as two separate companies: one with good assets – such as the Chevrolet, Cadillac, Buick, GMC and Pontiac brands (those last three are open to debate, of course) – and one with bad assets – like the HUMMER, Saab and Saturn brands.

Kresa said the concept “is a wonderful idea for allowing a new General Motors to emerge,” he said. “There are a lot of constituents right now that have some dibs on each of those and make sure that whatever comes out is reasonable. This is not a done deal. We want to do something that would be done quickly.

“The question is, is that the quickest way to do it? And we’re looking at that.”

Source: Automotive News


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