A group representing General Motors bondholders fears the company’s latest restructuring fails to sufficiently address challenges facing the company, a person familiar with negotiations between the group and GM has said.

The group is at the centre of negotiations to reduce GM’s US$27bn in unsecured debt through a debt-for-equity swap, a key piece of the auto maker’s plan to escape bankruptcy, Dow Jones reported.

If GM fails to cut a deal with bondholders and get the debt exchange under way by 31 March, additional federal loan funding requested in its reorganisation plan submitted to the government last Tuesday would be at risk.

Bondholders are sceptical that cost cuts outlined by GM is its latest plan – including 47,000 global job cuts, five additional plant closings and deeper reductions in dealers and nameplates – go far enough given the rapidly deteriorating economy, the person told Dow Jones.

“The question is, ‘Did they go far enough, or are they just layering debt onto debt?'” the person said. “They need the company to drive hard so it is competitive soon, not in 2012.”

Further complicating the talks are consecutive negotiations under way with the United Auto Workers, the report added.

On Tuesday, representatives for the bondholder committee said GM needs “shared sacrifice from all stakeholders,” and that it needs to see more information on terms being ironed out between GM and its union who are in talks to restructure $20bn in obligations to retired hourly workers.

“The fact remains that GM’s future viability and competitiveness is of utmost importance to the company’s creditors,” the committee said in a statement. The committee submitted a framework for GM’s attempt to restructure the debt earlier this week, but details of that plan have not emerged, Dow Jones noted.