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Michigan Says It Can Live With GM Bankruptcy

Gov. Granholm says talk about GM declaring bankruptcy 'is unhealthy,' but such a filing is something the state 'can live with' if it strengthens the automaker.

DETROIT (AP) -- Michigan's governor says talk about General Motors Corp. declaring bankruptcy "is unhealthy" but says such a filing is something the state "can live with" if it strengthens the automaker.

Jennifer Granholm said Monday bankruptcy isn't something she wants to see for Detroit-based GM or Auburn Hills-based Chrysler LLC.

Granholm tells the Detroit Free Press she wants bond holders begin to bargain in good faith with the automakers before any filing.

She says a pre-bankruptcy agreement "is going to be better than the haircut" the bondholders are "going to have to take otherwise."