GM sets announcement for Monday in NYC; White House braces

GM sets announcement for Monday in NYC; White House braces


Updated at 8:55 p.m.

General Motors, which is expected to file for bankruptcy reorganization Monday, announced today that CEO Fritz Henderson will hold a midday news conference Monday at the GM Building in New York City.

Bankruptcy experts have said GM would most likely file for bankruptcy in New York.

The first hearings in the case, where GM would win approval to keep spending money on essential operations, are expected Wednesday.

The White House, meanwhile, braced to lead GM into bankruptcy Monday, as officials cheered the progress in Chrysler LLC’s bankruptcy case and called it “a hopeful example” for GM.

President Barack Obama will discuss the auto industry in a separate event set for Monday, and White House spokesman Robert Gibbs said the president’s daily economic briefing focused on the state of GM and Chrysler. Steven Rattner and Ron Bloom, the leaders of the president’s auto task force, were seen walking into the White House late this afternoon.

Even as it prepares for a GM bankruptcy designed to pare much of the company’s debt while granting the government a 72.5% ownership stake, the administration said it was still discussing how to manage its investments.

Gibbs said President Obama had reiterated today that he didn’t want day-to-day control – but that the government would keep a close eye on how GM uses new loans that the company says will total at least $30 billion.

“There obviously is a balancing act,” Gibbs said today. “While not running an auto company on a day-to-day basis, obviously there will be concern about investments by the taxpayer as there should be and those are issues that as part of this restructuring will be worked on."

Gibbs would not confirm that GM will file for bankruptcy after a Saturday deadline for bondholders to drop any opposition in return for up to a 25% stake in the new company. But he said the administration had seen progress in GM’s restructuring.

He also defended the work of the auto task force as “saving jobs, saving dealerships,” and said the unions and bondholders had compromised by “fairly comparable” amounts to save the companies.

“It’s incorrect and not accurate to say that somehow … that the unions have given less or haven’t played their part,” Gibbs said.

Gibbs also said the administration expected that the purchase of Chrysler by Fiat S.p.A. would be approved by a bankruptcy court in a matter of days.

“Chrysler is a hopeful example for GM,” he said.

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