GM fears survival after possible bankruptcy
General Motors has revealed its auditors have raised “substantial doubt” about its ability to survive outside bankruptcy if it fails to stem its losses and stop burning cash.
The company is seeking up to $30bn (£21bn) in US government aid to restructure outside a court-supervised bankruptcy process. The European Commission has offered to hold a meeting of European Union countries affected by the problems.
GM says its creditors have agreed to waive a requirement that could have allowed them to force the automaker to repay more than $6bn (£4bn) in order to allow them to press its case for government aid.
Without further government aid, outstanding debts could force GM into bankruptcy, the company warns.
They add that a bankruptcy filing could force liquidation because of the lack of financing its reorganisation would require and consumer reluctance to buy vehicles from a bankrupt automaker.
“Our future is dependent on our ability to execute our viability plan. If we fail to do so for any reason, we would not be able to continue as a going concern and could potentially be forced to seek relief through a filing under the U.S. bankruptcy code,” GM said in a statement.
GM is already looking to separate its European operations. Swedish auto brand Saab is up for sale and attempting to reorganise under new ownership and with aid from the Swedish government. Opel and Vauxhall could go down the same route.
Lat month, GM restructured its European marketing operations for three of its marques. The move saw new chief marketing officers introduced at Opel, Chevrolet and Saab.
