Auto Sales Will Remain Weak in May: GM CEO
Auto sales continue to be week this month as consumers struggle with lack of confidence and lack of credit, General Motors CEO Fritz Henderson said Tuesday.
In addition, Henderson told CNBC that GM would prefer not to reorganize under bankruptcy, but is prepared to go down that road, and that President Obama's new emissions targets are achievable.
"I would say the (auto sales) situation continues to be weak," he said. "I think it has to do with confidence, credit and income for the consumer."
"At this point, May feels a lot like April," Henderson added.
'Going to Get Our Job Done'
The company is still working to reorganize before a June 1 deadline, and "if we had our druthers, we'd do this outside of bankruptcy," he said.
Bankruptcy brings with it risks and costs, Henderson said, but added the company is prepared to file for bankruptcy protection if needed.
"Every day counts leading up to June 1," he said.
"We're going to get our job done and we're going to get the business restructured," he said. "If we can't accomplish outside of a bankruptcy process we’ll do it within the bankruptcy process and we'll be ready to go."
He also said 90 percent is a "very tough" threshold for a bondholder agreement on return on money, so GM needs "to be ready to go through a bankruptcy process if it's required."
Emissions Cuts Achievable
General Motors is also supportive of the White House's new initiative on emissions standards and the company plans to meet the new standards, Henderson said.
The president's goal to cut greenhouse gas and emissions in new cars and trucks is achievable, Henderson said.
Looking to cut emissions by 30 percent by 2016, the new standards expected to be proposed by the White House will lead to an average fuel efficiency of 39 miles per gallon for cars and 30 miles per gallon for trucks. The target is four years earlier than the current federal law requires.
"The harmonization of standards is something extremely important for a business like ours," he said.
The company is betting that as the economy improves, fuel prices will rise again and fuel efficiency will be important, Henderson said.
But even at current gas prices, fuel efficiency is important to customers, he added.