General Motors to not file for bankruptcy

General Motors to not file for bankruptcy

General Motors Chief Executive Officer Rick Wagoner has said that the company has no plans to file for bankruptcy, as they believe that it would be a bad strategy to follow.

He added that the company was on solid financial ground despite posting massive losses of $10.6 billion last year. GM is struggling to compete against Japanese automakers in their home market.

The company bounced back by posting a first-quarter profit and is planning to trim $7 billion in annualized spending by the end of 2006.

Wagoner said in an interview: “People say, `Why don’t you just put the company in bankruptcy and dump those liabilities?’ That’s a bad strategy. That’s a bad idea.”

He added: “General Motors in bankruptcy would be a company that would sell a lot fewer units. If you were a consumer, you would think twice about buying a car from us.”