WASHINGTON -- An Obama administration official urged General Motors bankruptcy judge to approve a swift exit from Chapter 11 to boost consumer confidence in the auto maker.
A rapid emergence from bankruptcy creates the highest probability of avoiding the catastrophic and expensive meltdown in GM auto sales that virtually all industry observers predicted, Harry Wilson, a senior member of the Treasury Departments auto task force, said in a court affidavit.
Wilson added that Treasury cannot make an open-ended commitment to GM that Treasury will continue to fund GMs operations if the car company continues in bankruptcy, according to the June 25 affidavit posted Monday.
GM said in a filing that Wilson may be called as a witness at today's bankruptcy-court hearing.
At this hearing, the judge will consider the sale of the companys healthy assets to a new company controlled by the federal government.
GM has received $27.9 billion in federal aid and has applied for another $2.1 billion, said Greg Martin, the companys Washington spokesman. All told, the U.S. government has committed about $50 billion to underwrite the company's emergence from bankruptcy. The government is expected to hold a 60 percent stake in the "new GM."
Wilson said in his affidavit that a swift exit from bankruptcy court also would enable the new GM to begin making cars as quickly as possible.
GMs proposal calls for its new pared-down company to include the Chevrolet, GM, Cadillac and GMC brands while leaving the sale or liquidation of less profitable assets to the bankruptcy court. GM is selling or killing its Saturn, Hummer, Saab and Opel units.
Also, GM said earlier today it would not include its 50/50 joint venture with Toyota Motor Corp. at New United Motor Manufacturing Inc. in Fremont, Calif., in the new GM portfolio.