GM bankrupcty could split healthier brands off into separate company

Hidden away in General Motors' plans for the next 60 days is a bankruptcy strategy that could see its most successful brands peel off to form a second company, leaving the other brands to languish in bankruptcy for a more extended period.

The news comes from an anonymous source within GM via Reuters, and includes hints at what the new company would look like. Formed out of the most profitable units within the current GM, the company would split off during the early parts of a GM bankruptcy filing, reorganizing into a separate business.

Other brands, like Saturn, Pontiac, Hummer and potentially others, would remain in bankruptcy until sold or otherwise relieved of their debt burdens, leaving the still-viable segments of GM's business to carry forward without an albatross around its neck.

The split-GM scenario presupposes a corporate bankruptcy filing, however. That's not an impossibility, as new CEO Fritz Henderson made plain during Tuesday's press conference. If the management sees it as inevitable, they may not even wait to the end of the sixty day period to file.

Henderson has committed himself to doing whatever it takes to fix GM, even if it means going into bankruptcy. Considering his nebulous answers as to the future plans for Saturn and Hummer and his apparent willingness to go into bankruptcy - "with a plan to get out" - the split scenario, and bankruptcy filing, both look at the very least plausible, and could even be likely.