For weeks, General Motors has been working to prepare its customers, suppliers and employees for the hard landing most analysts see waiting at month end: a bankruptcy filing.
The embattled automaker’s drop dead date is Monday, June 1 when it has $1 billion in bond payments due that it plans to skip. Five days earlier, on May 27, GM learns how much of some $27 billion in bonds it was able to retire in exchange for its devalued stock.
Analysts and restructuring experts see little chance GM will meet its target of wiping its balance sheet almost clean of bond debt. That would leave one option: a Chapter 11 filing.
There’s another reason that bankruptcy has now become all but certain in the view of most analysts: the drag of too many GM dealers competing against each other for the same shrinking pool of Chevy, Cadillac and Buick shoppers.
As expected, Chrysler LLC used its bankruptcy ask a federal judge to cut it free of almost 25 percent of its U.S. dealerships. GM is expected to detail its own plans to eliminate about 2,600 dealerships as soon as this week.
