According to an article in the Star-Telegram, General Motors Corp.’s new CEO Fritz Henderson announced that more plant closures (which means more job losses) may be necessary to meet tougher requirements to receive taxpayer backed loans.
The article said:
In his first press conference as CEO, Fritz Henderson said he expects the company would “need to take further measures” in terms of plant closures. That’s beyond the five plants the company said it would shutter when it submitted a restructuring plan to the government last month.
GM is also planning to offer another buyout program to workers who rejected the last one which included a car voucher. More GM plant closures will cause more job losses further hurting those areas most dependent on the auto industry. In a statement that shocked many, GM’s new CEO has publicly conceded that it is now more probable that GM will file bankruptcy. Even with the bailout money, massive job losses, restructuring and a new CEO, bankruptcy is still looking like the most likely end point for this auto giant.
Henderson said that although bankruptcy filing is not preferred, it is “certainly more probable” than in the past. The company, he said, has until June 1 to accomplish changes sought by the government or it will be in bankruptcy. The 60-day deadline should be enough time, but if it becomes evident that the changes can’t be made by the deadline, GM could go into court sooner, he said.
“It doesn’t have to take 60 days. If it’s quite clear that we’re not able to accomplish what we need to do in terms of operational restructuring, reduction of debt on the balance sheet and what we need to do to accomplish these broad parameters of having a viable business, this will be a management judgment” reviewed by the Obama administration’s autos task force, he said.
A GM bankruptcy could be devastating for the entire economy, workers and other businesses. Those workers who would be negatively impacted by a GM bankruptcy through job losses or reduced wages need to prepare themselves now. Reducing debt, reducing expenses, saving and considering personal bankruptcy if necessary is the best way to prepare for a possible job loss especially if you expect that you will be unemployed for an extended period of time.