Government Disputes Report of Early GM Bankruptcy

Posted: May 22, 2009

Conflicting media reports this morning say the U.S. government may push General Motors into bankruptcy ahead of a June 1 deadline - or it may not.

The confusion began with a Washington Post report. The Post wrote, "The Obama administration is preparing to send General Motors into bankruptcy as early as the end of next week under a plan that would give the automaker tens of billions of dollars more in public financing as the company seeks to shrink and reemerge as a global competitor." The report quoted "sources familiar with the discussions."

A later Reuters report read, "The Obama administration has no plans to push General Motors Corp into bankruptcy next week and the outcome of the automaker's restructuring efforts may not be known until a June 1 deadline." Reuters quoted "a source familiar with the situation."

The dispute centers only on timing. Both unidentified sources concede that bankruptcy is likely.

Reuters quotes its source, "who was not authorized to speak publicly about the matter," saying, "GM faces a number of hurdles and it may well be that a court process is necessary to effectuate the restructuring, but the administration is committed to standing by the restructuring process whether or not that occurs."

If you're in the market for a new car, check out the U.S. News rankings of this year's best cars as well as this month's best car deals.