GM's Wagoner: "No Bankruptcy"

July 11, 2008

General Motors has no intention of declaring bankruptcy, despite the dire warnings of some leading industry analysts worried about the worsening health of the domestic auto industry in general and GM, in particular.

"We have no thought of (declaring bankruptcy) whatsoever," said the automaker's CEO, Rick Wagoner, during an appearance at a business event in Dallas. The executive expressed clear disappointment in having the "b" word back in the headlines - as it was, repeatedly, two years ago. "The rumors of it don't help anything and are completely inaccurate," he said.

Wagoner insisted that despite the increasing problems facing GM, the company's financial health will remain "robust," and he stressed his belief that the company has a number of different, acceptable options should it find the need to raise additional capital.

The latest talk of financial failure was kicked off last week, when a Merrill Lynch analyst warned that "bankruptcy is not impossible." Other analysts have downgraded the stock sharply as shares have tumbled to their lowest levels in more than half a century.

But following Wagoner's unambiguous response, GM rebounded, closing Friday's market at $9.92, a 2.37 percent increase for the day.

During his conversation with reporters, Wagoner also dismissed reports that GM is considering the elimination of any of its eight U.S. car brands--other than Hummer, whose fate the maker has already said is up for consideration. It is considered a strong possibility that GM will either sell or shutter the big SUV brand, which has become an icon of the current oil crisis.

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