Throughout the company’s cash crisis, General Motors (GM) CEO Rick Wagoner has insisted that the company has “no contingency plan” should Congress decide not to bail it out. We’ll assume that Rick is, in fact, an intelligent life form and is just bluffing. Unfortunately, GM’s board just blew his cover.
WSJ: Members of General Motors Corp.’s board of directors are willing to consider “all options” for the ailing auto maker, including an eventual filing for bankruptcy protection, a stance that puts them in rare disagreement with Chairman and Chief Executive Rick Wagoner, people familiar with the matter said.
As part of his push to win a federal bailout for the company, Mr. Wagoner told Congress this week that GM management believes bankruptcy protection is not a viable option for the company. Instead, GM is focusing on persuading lawmakers to provide financial help, Mr. Wagoner said.
The board, which in the past has publicly offered Mr. Wagoner its strong support, agrees that seeking government funding is the company’s top priority. But it isn’t willing to dismiss the possibility of a bankruptcy filing, say people familiar with the thinking of the board’s outside directors.
In a statement provided to The Wall Street Journal on Friday, GM said the board had discussed bankruptcy but didn’t view it as a “viable solution to the company’s liquidity problems.” The board “is committed to considering all options in light of circumstances as they may develop.” A GM spokesman, Tony Cervone, said that management is considering doing everything in its power to avoid a filing.
GM said Mr. Wagoner declined to be interviewed.
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