US: GM awaits delayed fed funds
General Motors Corp chief operating officer has said the automaker expected to receive a delayed US government loan payment in the next several days that it needs to avoid running out of cash.
GM had received an initial $4bn in emergency funding from the US Treasury on 31 December and had expected to receive its next $5.4bn payment from the government last Friday, Reuters said.
That payment was delayed, Henderson told the Automotive News World Congress, because the automaker was required to submit additional information and because government officials were busy with other business and the presidential inauguration.
"If we don't get the second instalment of our funding, we'll run out of cash. It's that simple," Henderson was quoted as saying.
GM expected to receive its next $5.4bn tranche in the next several days but, without the funding, GM run out of cash "well before 31 March," Henderson said.
He also said GM had had ruled out voluntary bankruptcy because of the risks to sales but could hypothetically be forced into bankruptcy if the US government were to withdraw pledged financial support.
"Much has been written about how simple (bankruptcy) would be. I can only tell you how devastating the risks are to the business, which is why in the end we think it is a truly terrible strategy -- but it can happen," Henderson said.
"We're doing contingency planning in the event that something bad happens, and we have to deal with that, but it's not a great environment to be in," he added.