GM: Bankruptcy still probable, but it's still trying to avoid it

DETROIT -- The automaker has just a few weeks until a June 1 government-imposed deadline which could force GM to seek Chapter 11 bankruptcy protection. GM, which is operating on $15.4 billion in government loans, needs to persuade its debt holders to forgive much of what the company owes, negotiate new labor contracts and start working on trimming its dealer network.

"Certainly the task that we have in front of us is large," Henderson said Monday during a conference call to update the company's restructuring efforts. "There is still an opportunity and still a chance for it to be done outside of a court process."

GM shares on Monday fell 17 cents, or 10.6%, to close at $1.44.

If it needs to file for bankruptcy protection, GM will do so in the U.S., and may, as well, need to file for similar court protections in other countries. The automaker would likely split itself into two parts: a "good" GM and a "bad" GM. The bad one would stay in court protection to hash out issues like pensions and debt and selling old plants. The profitable assets would be sold to a newly created good GM that would emerge and continue doing business.

Also Monday, Henderson left open the possibility that GM would move its corporate headquarters out of its sleek offices in Detroit. The company, he said, is looking at the cost of everything.

"It's not like we have (a move) queued up at the top of our list," he said, adding that GM has many people in Detroit and is proud to be here.

GM still is negotiating with the United Auto Workers about six factories it intends to close, Henderson said, and is negotiating with the UAW and Canadian Auto Workers about concessions.

The company also plans to notify dealers later this week about its plans to reduce their ranks by about 2,600 by 2010. The company has 6,246 dealerships, many of which are not profitable because of lower sales volumes.