The US government will pull its support from General Motors (GM) if the automaker does not get court permission for a speedy exit from bankruptcy protection by next Friday, an official testified on Wednesday.
“We cannot make an open-ended commitment,” Henry Wilson, a member of US President Barack Obama’s automotive task force, told the New York court.
GM is seeking court permission to sell its best assets to a new company in which the US government will get a majority stake.
Should the plan be approved in time, Wilson said the government could begin to sell its stake as early as next year, once the new company is ready to launch a public offering.
Officials have said the Obama administration has no intention of nationalizing GM over the long term and will not be participating in its day-to-day operations.
Under intense questioning from lawyers representing creditors dissatisfied with the plan, Wilson testified that the government had determined that a speedy bankruptcy was the only way to save GM from liquidation.
GM lawyer Harvey Miller also insisted that the asset sale is the only solution.
He said GM intended to “try and facilitate an IPO [initial public offering] as soon as early 2010.”