Following President Obama’s rejection of General Motors’ viability plan, the Detroit-based automaker is currently working on several options, some of which include bankruptcy. Although GM still doesn’t favor a Chapter 11 outcome, the company has devised a scheme which could separate the automaker into two separate entities.
According to Reuters, GM’s new plan would see its core brands move quickly in and out of bankruptcy while its non-core brands would stay under bankruptcy protection for longer – essentially creating two companies. The “new” GM would likely contain Chevrolet , Cadillac , Buick and GMC while the “old” GM would represent Saab , Saturn and Hummer. It remains unclear which camp Pontiac would belong to.
Companies in the old GM would be kept in bankruptcy until they were sold or killed.
Although GM is still opposed to bankruptcy, GM Chief Executive Officer Fritz Henderson said the company could file for Chapter 11 protection before the government’s June 1st deadline. The latest scenario seems to make a lot of sense as it shrink GM to its four core brands while still moving quickly through the bankruptcy process.
