General Motors chief executive Fritz Henderson said a bankruptcy filing is "more probable" than before given the concessions the company must achieve before the end of May, although it is working to avoid that outcome.
GM, which has received $13.4 billion in government loans, is working on parallel strategies: one that would restructure the automaker outside of bankruptcy court and another that would reorganize it inside.
"We are on a two-track plan," Henderson told reporters yesterday. "We have contingency planning underway."
In a push to be more transparent, yesterday's GM conference call was the first of a series of updates on the auto giant's decisions and actions aimed at remaking itself, which must be completed by June 1.
GM will need a $4.6 billion cash infusion in the second quarter to keep the company running, in keeping with a previous plan submitted to the Treasury Department.
"It would be premature to say there has been an approval for further funding, but the size that has been discussed has been consistent with what we have laid out in our plan on February 17th," Henderson said.
GM has not yet made a request for the funds, and last month the company announced it would forego its urgent request for $2 billion in federal loans because it was making progress reducing costs.
"We are working closely with GM to monitor those near-term working capital needs, and will provide resources as needed," an administration official said.
President Obama has pledged that his administration would provide the money necessary to keep GM operating as it revises its restructuring plans.
Henderson, who was appointed last month to replace G. Richard Wagoner Jr. as chief executive, reiterated that the company's revised plan will "go deeper and faster," while trying to skirt bankruptcy.
"I felt several weeks ago that it would be more probable that we would need to go through a bankruptcy process," he said. "I certainly feel that way. That continues today. But I wouldn't be able to hazard a guess as to what the probabilities would be."
GM is working on getting a "stable, sustainable" cash flow, as well as a "clean and healthy" balance sheet. It has also been talking to the ad hoc committee of bondholders, which is leading negotiations to swap debt for equity, and the United Auto Workers, which must reduce GM's large cash obligation toward retiree health care benefits.
But because Chrysler must make the same deep cuts by the end of this month, the union has been focusing its efforts on GM's rival.
"While our dialogue is open, I would expect that we would be able to pick up the pace a bit more here in the next several weeks," Henderson said.
He emphasized GM's goal of maintaining "four core brands" -- GMC, Buick, Cadillac and Chevrolet -- squashing speculation that the automaker wants to discard GMC and Buick, both very profitable.
The company also has decided not to sell ACDelco, a parts division, despite having potential buyers.
"We just concluded recently that we're not able to achieve the kind of price we would need for this business to justify it," Henderson said. "We are going to keep this business and run it and grow it."
GM is expecting three final bids for Hummer next week and is aiming to make a decision before the end of the month.
A group, led by private-equity firm Black Oak Partners, has approached GM about buying Saturn. GM is committed to running Saturn through 2011, the end of its model life cycle.
More than six potential buyers are interested in a stake in Germany's Opel unit, and Henderson said he expects a deal to materialize in two to three weeks. A number of parties are interested in Saab.
GM intends to close more manufacturing plants than its original target of 15 by 2014, and will accelerate the closing of dealerships.
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