(MarketWatch) Members of the board of directors at General Motors Corp. may be at odds with the ailing automaker's top executive in their willingness to consider all options, even bankruptcy, according to a published report.
A story in the online edition of The Wall Street Journal citing people familiar with the matter reported GM's board, which in the past has publicly offered Chairman and Chief Executive Officer Rick Wagoner its strong support, agrees that seeking government funding is the company's top priority but isn't willing to dismiss the possibility of a bankruptcy filing.
Wagoner told lawmakers in Washington last week that GM management thinks bankruptcy protection is not an option for the automaker and the company would focus on convincing Congress to provide financial support.
The Journal reported that in a statement on Friday, the company said its board had discussed bankruptcy but didn't see that as a "viable solution to the company's liquidity problems." A GM spokesman, Tony Cervone, said that management is considering doing everything in its power to avoid a filing, the Journal reported.
The Journal also noted GM said Wagoner declined to be interviewed and several of GM's board members could not be reached for comment on Friday.
On Friday, GM shares closed at $3.06, up 18 cents, or 6.25%. A year ago, the stock was trading at about $42.
GM, Ford Motor Co. and privately held Chrysler LLC went to Washington last week to ask for $25 billion in bridge loans. Lawmakers gave them until Dec. 2 to submit detailed plans for how they mean to better compete and innovate. Congress could then reconvene in a second lame-duck session to consider providing monies.
House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., sent a letter to the chief executives of the Big Three that lays out what the lawmakers mean by "viability" for their firms and accountability to taxpayers.
The letter said the companies must detail their current operating cash positions, provide estimates of the terms of the loan requested, bar the payment of dividends and excessive executive compensation and demonstrate the companies' abilities to achieve strengthened fuel efficiency requirements.
Pelosi also rejected Chapter 11 bankruptcy as an alternative for the Big Three. "I just think that would be digging a hole far too deep," she said, adding that such a scenario would prove devastating for workers, the economy and the U.S. manufacturing base.