GM could yet collapse completely if the sale of its ‘good’ assets are not approved by the bankruptcy court by July 10th.
President Obama originally set the deadline to ensure the bankruptcy process would be completed rapidly, but now the US Treasury could withdraw its funding for the restructuring of GM if the asset sale isn’t completed on time.
There are several objections to the proposed sale of GM’s assets and, if no deal is struck by July 10th, the US car giant could be forced into liquidation.
It’s an unlikely situation, however, particularly given the fact that the US government has already committed $50 billion to rescuing GM. A GM spokeswoman told The Detroit News that “logically there wouldn’t be strong motivation to stop funding given its investment in GM and the progress made to date”.
If a deal is struck, a ‘new’ GM will be created, free of all the ‘bad’ assets, such as huge pension and healthcare commitments for retired workers, that had been crippling the General.
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