U.S. Government Will Pull Out of GM If No Deal by July 10

The U.S. government will pull its support from General Motors if the automaker does not get court permission for a speedy exit from bankruptcy protection by July 10, an official testified on Wednesday. "We cannot make an open-ended commitment," Henry Wilson, a member of 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 U.S. 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 2010, once the new company is ready to launch a public stock offering. Officials have said the Obama administration has no intention of nationalizing General Motors 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. Judge Robert Gerber appears determined to plow through the objections as quickly as possible and has repeatedly asked lawyers to keep their line of questioning focused on the task of salvaging the company. Gerber could order GM to modify its plan to meet some of the 850 objections mounted by creditors or the automaker could reach a deal outside of court in order to speed up the process. Should Gerber dismiss the objections and grant GM the green light, creditors are given the right to appeal. But the precedent established by Chrysler's rapid-fire bankruptcy makes it unlikely they will succeed in blocking the automaker's swift emergence. GM, which filed for bankruptcy protection on June 1 after reaching agreements with its main union and the bulk of its major creditors, is said to be planning to launch the new company in mid July. That would be well ahead of the 60 to 90 day time frame predicted by President Barack Obama's administration, which spearheaded the process. Copyright Agence France-Presse, 2009