Report: GM Chairman Considers Dividing Automaker

Interim General Motors chairman has been studying all the company's options, including separating GM into two entities under a bankruptcy procedure.

NEW YORK (Kyodo) -- Kent Kresa, interim chairman of General Motors Corp., has been studying all options for his company's rehabilitation, including separating the company into two entities under a bankruptcy procedure, the Detroit Free Press reported Tuesday.

Kresa said in an interview with the newspaper that he would still prefer to see GM reshaped outside of bankruptcy court, the paper said.

"But he's talking daily with CEO Fritz Henderson about all options, including a bankruptcy that would separate the company into a so-called 'good GM,' including Chevrolet and Cadillac,' and an old GM of debt and surplus brands and plants to be liquidated," the newspaper said.

Kresa was quoted as saying "problems and risks" would be associated with bankruptcy but "it's impossible to predict how GM's future will unfold."

Meanwhile, the Detroit News reported the same day the government may agree to swap some of its $13.4 billion in General Motors Corp. debt for new equity in the company in a move to help boost GM's balance sheet. The transaction would effectively place GM under state control.

Kresa was named interim chairman of GM on March 30, when former chairman and CEO Rick Wagoner was asked by President Barack Obama's auto industry task force to step down.

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