General Motors Chrysler executives are reportedly considering accepting a pre-arranged bankruptcy as a final measure to gain a bailout package from the federal government, although they insist such a move would most likely lead to a liquidation of the companies.
The latest information comes from people familiar with the internal discussions, who also revealed to Bloomberg that there are a number of options on the table, including bankruptcy with liquidation protection. Discussions are currently taking place between members of Congress, company executives, lenders, union officials and other interested parties.
GM CEO Rick Wagoner has previously stated thatbankruptcy was not an option as it would turn away more customers from buying GM products. Chrysler has also previously stated that it does not intend to file for bankruptcy, however the current cash positions of both carmakers say otherwise.
Both will need about $11 billion from the federal government just to remain solvent until the end of the year. For this, they will most likely be asked to cut executive pay, reduce worker benefits, cut the number of brands and products, and launch more fuel-efficient vehicles.
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