DETROIT – Losses at General Motors Corp. (GM) are unsustainable, but the company is not headed toward insolvency, Chief Executive Richard Wagoner said Thursday.
"There is absolutely no plan, strategy or intention for GM to file for bankruptcy," Wagoner said in a letter to GM's 325,000 employees on the company's internal Web site.
GM, the world's largest automaker, has lost nearly $4 billion this year, while its shares have lost about 46 percent of their value.
The auto giant is struggling with high health care and commodities costs, stalled sales of its big sport utility vehicles and loss of U.S. market share to foreign rivals.
"The large losses at GMNA are unsustainable, for sure, and require a comprehensive strategy to address them ... a strategy that must be implemented promptly and effectively, to get our U.S. business profitable again," Wagoner said in the note.
GM shares, which fell to an 18-year low earlier in the day, rose $1.34, or 6.3 percent, to close at $22.63 on the New York Stock Exchange.
The letter comes amid wide speculation of a growing possibility of bankruptcy at GM and fears of a strike at bankrupt Delphi Corp. -- GM's main auto parts supplier.
A strike at Delphi, which plans to ask the court to void labor contracts with its unions if a deal is not reached by Dec. 16, could shut down some GM and Delphi plants and force GM to burn through billions of dollars, analysts have said.
Wagoner did not mention the impact of Delphi's bankruptcy in his letter. GM, which spun off Delphi in 1999 and agreed to pay retirement expenses for some former GM workers if the supplier stopped payments, could face up to $12 billion in liabilities for the supplier.
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