General Motors intends to keep its headquarters in Detroit, even though its U.S. operations are in far worse shape than some of its growing overseas units, CEO Fritz Henderson said Monday.
At a press conference Monday Henderson was asked about speculation that the company might move its headquarters away from its long-time home as part of the reorganization process it is now completing.
While Henderson said all options are being examined as part of the company’s turnaround efforts, he said “we don’t have any such plans” to move out of Detroit currently.
He added that if GM (GM, Fortune 500) determined that there are efficiency and cost advantages to moving, it would consider a move. But with the company trying to stem years of market share and financial losses, Henderson said that exploring a move is not a priority at this time.
“It’s not like we have that queued up on the top of our list,” he said. “We’re proud to be here.”
Only 26% of GM’s worldwide sales in the first quarter came from the United States, down from 36% in the same period a year ago. The company sold only about 20,000 fewer vehicles in China than it did in the U.S. in April, prompting some to speculate that moving GM’s headquarters overseas would be a good idea for the company.
In other comments Monday, Henderson repeated his earlier statements that he believes a bankruptcy filing is now “probable” as the company tries to reach agreements with creditors, the United Auto Workers union and its dealership base to cut costs.
The company has been given until the end of the month by the Treasury Department to reach those agreements or file for bankruptcy.
GM rival Chrysler LLC was forced into bankruptcy last month after failing to reach a deal with all its lenders. However, the company did reach agreements with the federal government, unions, some lenders and Italian automaker Fiat to keep the company from being shut down.
Henderson said if GM files for bankruptcy, it is possible that only its U.S. or North American operations would be in bankruptcy while its worldwide operations would not be forced to operate under bankruptcy protection. But nothing is certain just yet.
GM has received $15.4 billion in assistance so far from the U.S. Treasury and has said it’ll need another $2.6 billion in help this month to keep paying its bills. GM will also need $9 billion to get it through the remainder of the year. The company announced last week that it lost $6 billion in the first quarter and burned through more than $10 billion in cash during that period.
Henderson said that there are ongoing talks taking place with the UAW, and that he is open to scaling back plans to import about 7.5% of the vehicles sold in the U.S. from non-North American plans by 2014. The union has been critical of those plans.
He also said dealers that GM is looking to cut ties with would start being notified of the company’s plans later this week, but that the wind-down process of those locations being cut would take the rest of this year.
GM announced last month that it intended to cut its dealership base by 42%, to just 3,600, by the end of 2010.