“The General Motors Board of Directors authorized the filing of a Chapter 11 case with regret that this path proved necessary despite the best efforts of so many. Today marks a new beginning for General Motors. A court-supervised process and transfer of assets will enable a New GM to emerge as a stronger, healthier, more focused and nimbler company with a determination not to just survive but to excel,” said Kent Kresa, the interim chairman, who replaced Rick Wagoner when the Obama administration fired him last month.
“The Board concluded that the proposed transformation will maximize the value of the enterprise, and the return to the many stakeholders who have been involved with GM over the years,” Kresa said this morning.
Whether the board fulfilled its fiduciary responsibility will be part of the legal challenges to its members during bankruptcy hearings by objecting creditors and bondholders, hence the existence of this statement.
“We are appreciative of the support from the U.S. Treasury, the President’s Task Force on Autos, the UAW and its members, salaried employees and retirees, concurring bondholders, and very importantly, the American taxpayers. The Board is confident that this New GM can operate successfully in the intensely competitive U.S. market and around the world. The Board stands behind the people of GM in embracing this unique opportunity to create value and a new company that will design, engineer, build and market the best cars and trucks in world,” said Kresa.
The President, on March 30th, announced that a majority of the directors of New General Motors would be new, so by implication, some existing directors will continue with New GM and some new ones will appear. They will be selected based on consultations between Kresa, his colleagues and the Auto Task Force.
Fritz Henderson’s future?
Senior administration officials were non-committal about GM CEO Fritz Henderson’s future, but said they expected his relationship with the board of directors to continue. Since CEOs serve at the pleasure of the board and a new board is coming, Henderson’s future is unclear. At Chrysler both the Chairman and the CEO are being replaced in the New Chrysler. (more…)