DETROIT — The Obama administration has demanded that General Motors get financially healthy in 60 days — or else.
That demand is likely to force the UAW and the company's unsecured bondholders to take much bigger hits than they were discussing in March.
"We need to go deeper, we need to go faster, to have a clean balance sheet," GM CEO Fritz Henderson said Friday.
At bottom, that means creditors will have to forgive tens of billions of dollars more of what GM owes them if the company is to avoid bankruptcy in June.
Henderson's lever: Bankruptcy could wipe out all of the $27 billion in debt to unsecured bondholders and the remaining $20 billion owed to the UAW's Voluntary Employees' Beneficiary Association, or VEBA — the fund to cover retirees' health care. The bondholders and UAW are subordinate to secured debt holders and the U.S. government.