General Motors Corporation Media Update Call Transcript

May.12.09 | About: General Motors (GM)

General Motors Corporation (NYSE:GM)

Media Update Call Transcript

May 11, 2009 9:30 am ET

Executives

Steve Harris – VP, Global Communications

Fritz Henderson – President and CEO

Analysts

Dave Shepardson – Detroit News

John Revelle [ph] – Auto-Owners News [ph]

Rod Maloney – WDIV TV News

Todd Lassa – MotorTrend

Jim Henry [ph]

John Reed – Financial Times

John Stoll – Wall Street Journal

Chris Reiter – Bloomberg News

Tom Krisher – The Associated Press

Ken Bensinger – LA Times

Christine Buckley – The London Times

Grace Macaluso – The Windsor Star

Robert John Rugger [ph]

Philip LeBeau – CNBC

Kevin Krolicki [ph] – Reuters

David Welch – BusinessWeek

Jeff Flock – Fox Business Network

Sharon Terlep [ph] – Dow Jones

Jennifer Keiper – Fox News Radio

Jeff Green – Bloomberg News

Bill Vlasic – The New York Times

Richard Truett – Automotive News

Chris Isabella [ph] – TMC Money [ph]

Tom Walsh – Detroit Free Press

Jon Leanhy [ph] – Auto Executive Magazine

Michelle Caruso-Cabrera – CNBC

Operator

Gentlemen, thank you for standing by and welcome to the General Motors media conference. For today's conference all the participants will be in a listen only mode. However, there will be an opportunity for you to ask questions and instructions will be given at that time. At this point, I will turn the conference now to Mr. Steve Harris. Please go ahead sir.

Steve Harris

Thanks very much John. Good morning everybody. Just want to kick things off, just want to remind you this is the second in a sort of series of these that we promised where we would be as transparent as we could through this process and that we would have regular conversations with you roughly every two weeks or whenever we have something of real news value to talk about. Sometimes like today, we don't have any real news to be honest with you, and that there will be a lot of areas today where we just are not going to be able to provide any kind of in-depth comments. What we will obviously do try to respond to your questions.

So just let me remind everybody this is on the record. I would ask all of you to limit your questions to one per person so we can get to the maximum number of people. And with that, let me hand it over to Fritz Henderson, our President and CEO.

Fritz Henderson

Thank you, Steve. Good morning. I think as Steve said, we committed a regular at least every other week transparency, and I think we have met that if not exceeded it. So at this point, hopefully we have had a little bit easier time than last time, getting people into the call. It sounds like we're been able to accomplish that. We did put a call out to Michigan Stadium to see if we could get so many slots, and we couldn't that done. But we did expand capacity. So at this point, I don't really have introductory remarks other than to welcome everybody, and I'm ready for my first question. Thank you.

Steve Harris

Okay, operator.

Question-and-Answer Session

Operator

Thank you, and just a quick reminder, if you do have a question please press star then one. And first we will go to Dave Shepardson with Detroit News. Please go ahead.

Dave Shepardson – Detroit News

Hi, first thanks for doing this.

Fritz Henderson

Hi, Dave.

Dave Shepardson – Detroit News

Is GM considering moving its corporate headquarters, there is a little bit of scuttlebutt about that?

Fritz Henderson

I have seen actually seen a fair amount of that scuttlebutt. We were looking at frankly everything within our business, but it sounds like we have that queued up at the top of our list. But as we look at the structure, we look at the business; we are looking at everything, particularly as we slim down. But at this point, I don't really have anything to report. Our headquarters is here, we've got a fairly large complement of people here, and we are proud to be here.

Dave Shepardson – Detroit News

And will that be motivated by tax purposes, if you did move, would that be a factor?

Fritz Henderson

I mean, like I said, Dave we don't have any such plans, but if we did, it will be motivated by business rationale, which is the cost, efficiency, and speed.

Steve Harris

Okay, let me just remind everybody, one question per customer. So let us move on to the next one operator.

Operator

And that will be from John Revelle [ph] with Auto-Owners News [ph]. Please go ahead.

John Revelle – Auto-Owners News

Just a couple of quick queries, how much close are you to deciding your third bid for the European business , and secondly does the German government have casting votes on who actually wins the sale of process over here?

Fritz Henderson

Two things, first, we are speaking with multiple bidders with the objective to at least have some understanding, wouldn't be certainly a binding agreement, but certainly would be understanding of what an agreement might look like by certainly no latter than the end of this month, and our target is to do it slightly before the end of this month. With respect to the German government, we have a need for funding actually in our European business that is important and urgent, and the German government hasn’t indicated an interest in running our business. But on the other hand, we do need their support in terms of funding. So, you know, I would say who we pick is – they are going to – once they a say, that would not be the right term. But, you know, we're going to make sure that any partner we pick in this business is going to be suitable for them so that if we need their support, we obviously want to find any partner to be reasonable and acceptable.

Steve Harris

Next question.

Operator

And that is from Rod Maloney with WDIV TV News. Please go ahead.

Rod Maloney – WDIV TV News

Good morning Fritz and Steve.

Fritz Henderson

Hi Rod.

Rod Maloney – WDIV TV News

Just curious about, you had said at the last news conference that you intended in the first two weeks of May to give us information regarding plant closings and headcount reduction, and if my recollection is correct about dealerships and closings there as well. Do you have anything new that can help us and give us some guidance, particularly when it comes to plants, the Orion plant here, like Orion?

Fritz Henderson

We will start notifying dealers, I will come back to plants in a second, we will start notifying dealers a little bit later this week in our game plan. So that starts to roll out later this week, and with respect to plants, we are still in dialogue with the UAW. So I think we're a little premature on that subject.

Steve Harris

Next question.

Operator

And that is from Todd Lassa with MotorTrend. Please go ahead.

Todd Lassa – MotorTrend

Hi, good morning. Another question about Opel, I wonder if you could clarify – in the last week or so there have been reports that Fiat wanted to take about 80% of Opel, and you wanted to give up only 60%. Could you tell us what you mean by sale, would there be any – would there be any – would the structure in place that makes GM a global company and has Opel integrated with North American and Korean operations, would that change under a sale?

Fritz Henderson

Pretty broad question. I'm not going to get into what the details or what a deal structure would look like as we need to negotiate those. I think to the extent that we have a partner in our business in Europe and anticipate we will, we will need to respect the legitimate interest of that partner, whichever that partners is, and I do think that there will be substantial additional benefits from running the business on a global basis. On the other hand, I think we need to respect the rights and interests of the partner in any such agreement. So, I think things will change. I mean business changes if your 100% owned, versus partially owned.

I mean just it works and on the other hand, we have been able to successfully manage global businesses in a shared power structure. For example, in Korea we own a little over 50% of our business in Korea. We've worked very co-operatively with other shareholders in that business, and that business benefited significantly from the part of being in GM's global network. In a similar fashion, we operate in a true joint venture in China with a great partner SAIC. We leveraged the best of both sides and it worked very, very well.

But I do think that, we're very realistic on this that any time you bring in another partner into the business as an equity partner, it is a shared power structure, and you got to make sure that you legitimately address the needs of both of the partners.

Steve Harris

Okay, next question.

Operator

Jim Henry [ph] with (inaudible). Please go ahead.

Jim Henry

Hi, to the extent that you can, can you give any kind of a progress report on the bond drop, I mean, are you inclined to give kind of a running total, how that has gone like GMAC did with your bondholders?

Fritz Henderson

I can. The GMAC debt exchange actually had an early window period, including an early tender compensation, our offer doesn’t have that. So, we don’t have interim information, at least I don’t preview to it [ph] and moreover I don't think that we will get a lot of good information on this until we are at or near the end of the period. So, I don’t have anything interim to report.

Steve Harris

Next question.

Operator

That will be John Reed with Financial Times. Please go ahead.

John Reed – Financial Times

Hi guys.

Steve Harris

Hi, John.

Fritz Henderson

Hi, John.

John Reed – Financial Times

Another question about Fiat and Opel, and again, I know you don't want to go into great detail, but could you just say in principle, would GM be willing to take a smaller stake than Fiat in a jointly owned company if they are the ones that come in?

Fritz Henderson

I'm not going to go into any detail. We certainly indicated a willingness to consider moving into a minority position. And I really want to go – I don't want to go further than that. I think what we need to do is, we obviously need to negotiate something before we say what it is.

Operator

And next we will go to John Stoll with Wall Street Journal. Please go ahead.

John Stoll – Wall Street Journal

Hi, Fritz.

Fritz Henderson

Hi, John.

John Stoll – Wall Street Journal

Can you give us sort of a – where we are at with the United Auto Workers deal? Do you plan to seek something similar to Chrysler, and if not what are you seeking there, and when did those discussions heat up?

Fritz Henderson

In dialog with the UAW, currently actually in dialog with the UAW, I anticipate we will be discussing matters of importance for both the UAW, our employees and the company. And we're going to focus on General Motors in those discussions. So nothing to report John other than we're in dialogue with them.

Operator

And we will go to Chris Reiter with Bloomberg News. Please go ahead.

Chris Reiter – Bloomberg News

Yes, hi, I have another Opel question. There have been indications from Fiat that they are interested in other assets besides just Opel. Can you comment on whether GM is willing to consider disposing of Latin American or other operations as part of the Opel deal?

Fritz Henderson

No, actually I'm not going to comment on it. Our business in Latin America and specifically in Latin America, Africa and Middle East has been a very solid contributor in the last several years. It is a volatile part of the world. On the other hand, it is a business that we know well and operated in well, got great returns over time. So I mean this is a business that we know and we like very much. I'm not going to comment as to what role it might play in the negotiations.

Operator

And we will go to Tom Krisher with the Associated Press. Please go ahead.

Tom Krisher – The Associated Press

Hi, (inaudible). Is there any possibility of modifying the bond exchange to maybe up, I know you are somewhat limited by treasury at the 10% level, but is there any possibility of making a change there?

Fritz Henderson

I mean the guidance given to us by treasury, when we launched the bond exchange remains in effect today. There is really no changes from that. So, no, we don't have any plan to make modifications at this point.

Operator

And we will go to Ken Bensinger with the LA Times. Please go ahead.

Ken Bensinger – LA Times

Hi, can you give us a little update on the different brands that you are looking to potentially see, any updates on Hummer, Saturn, although we have heard some speculation about some new people on the game?

Fritz Henderson

So, one at a time, in Hummer’s case, we received three offers several weeks ago. We are negotiating with two parties today to try to reach some acceptable terms. My timeframe, actually I was hoping to have done it in April. We obviously didn't get it done. But it is something that is getting done. We're working on it every week. So, I anticipate if there is a deal to be had, we can read something by the end of this month, for example. Saturn, it is a different thing. We have been supporting the distribution channel in terms of their looking for alternative sources of products and supply. We continue to support that effort, and though we don't have anything further to report, I think a number of parties have emerged just having an interest in what is a truly and really solid distribution channel. They are great retailers, and as I said, we are preparing to kind of facilitate something in that regard as long as it meets GM's interest, or maybe said more accurately, as long as it doesn't cost us anything, or doesn't hurt us, we are prepared to provide support to see if there are options there.

Steve Harris

For Hummer, we are actually selling the brand and the products in the business really. In the case of Pontiac, there has been some discussion. We don't have any dialogue underway with Pontiac. Pontiac would be a brand that we will wind down, as we identify it as part of our viability plan, and lastly in Saab’s case, a number of parties have come forward in Sweden to consider the business. In dialog with those – that process is being run from our Swedish business. The business itself is in reorganization within Sweden. So that is a process that we respect, we support it, but we don't run it. And so they are talking to a number of interested bidders, and you know this is something that it would take more shape and form over the next month or two, rather than the next week or two.

Operator

And next we will go the line of Christine Buckley with The London Times. Please go ahead.

Christine Buckley – The London Times

Hello, there has been a lot of speculation that if Fiat was to take over Opel or take a large stake in it that it could effectively close Vauxhall in Britain. Are you asking for any kind of conditions on a sale that wouldn’t happen or not?

Fritz Henderson

Not going to get into the discussion regarding what the details are in the discussion regarding any of the parties. Our business in the UK, I mean it has historically been our largest market in Europe. Our Vauxhall dealers do a fantastic job, and our plants there have done superb work actually. So, I mean, we consider it an integral and a crucial part of the business, but I can’t really go into the details as to what any counterparty may or may not want to do or what might happen in the negotiating table.

Operator

And next we will go to Robert Kendell [ph] with German Broadcast [ph]. Please go ahead. Robert Kendell, your line is open.

Fritz Henderson

Robert better come off mute. We will move on to the next one.

Operator

And next we will go to Grace Macaluso with The Windsor Star. Please go ahead.

Grace Macaluso – The Windsor Star

Good morning. I am – I would like to find out whether you are considering moving up the closure date with any of your plant operations in Canada, particularly the GM transmission plant, and Windsor, Ontario. Also are you expecting to seek, is your Canadian parent rather Canadian subsidiary expecting to see concessions in the closure agreement as the negotiations go underway in Toronto between CAW?

Fritz Henderson

Right, one at a time. First, I don't anticipate any change in timing with what has been previously announced certainly with regard to Windsor, and just more general, I don't anticipate, I'm not aware of nor do I anticipate any significant changes in that regard. With regard to the second issue as to what might or might not happen between GM and the CAW, specifically in Windsor or more broadly, you know, basically the dialogue has been opened with the CAW. Now that they concluded their agreement with Chrysler, I don't really have anything to report today.

Operator

And we’ll go to line of Robert John Rugger [ph] with (inaudible). Please go ahead.

Robert John Rugger

Hi, going back to Saturn, is there any attempt to do anything more than support the distribution channel. Would there be an opportunity for a buyer to pick up manufacturing as well?

Fritz Henderson

Our focus has been on supporting the distribution channel and never ahead of a buyer who is interested and actually this is something that we would encourage a buyer, who is interested in building in the US. We would strongly encourage that and we would be open to any entreaties in that regard and you know, maybe more positively. We’ve certainly indicated an openness to discuss this as part of the dialogue with interested parties. To date, I haven't seen any specific proposals in that regard, but this is something we would be open to.

Operator

And we’ll go to Philip LeBeau with CNBC. Please go ahead.

Philip LeBeau – CNBC

Hi, Fritz.

Fritz Henderson

Hi, Phil.

Philip LeBeau – CNBC

With regard to the dealers and the letters that are going to be sent out this week, those dealers who you’re going to notify that you’ll no longer be selling vehicles to them through General Motors. How quickly will that relationship end?

Fritz Henderson

That specific plan is actually, you know, is being finalized here early this week actually, because we planned to begin notifying later this week and so I think hold that question for another week or so, and we'll be able to provide you better definition.

Philip LeBeau – CNBC

And can you give me guidelines or can you say, okay, it is going to be within a month, two months, three months?

Fritz Henderson

No, no. What we would try to do actually is work with our dealers to effect an orderly wind down of other inventory position, and you know, return our powers, return (inaudible), to make sure we take care of customers. This is not a, you know – at least in our judgment a one-month process. This is something that would take place over a reasonable period of time, you know, to say what's reasonable. I think it depends obviously on individual dealer in the circumstances but, you know, this is not something that’s measured in weeks or months, or one or two months. It is, you know, something that as I look at it it’s work that would take place through ’09, as we would wind down and handle the distribution of customers, make sure the customers are taken care of, make sure that warranty is done, make sure that dealers are reimbursed for warranty, and those sorts of things. And it take, you know, this is not a several-week process.

Operator

And next we will go Kim [ph] with Reuters. Please go ahead.

Kevin Krolicki – Reuters

Hi, it’s Kevin Krolicki [ph] with you here actually.

Fritz Henderson

Hi, Kevin.

Kevin Krolicki – Reuters

Hi. Just a question on the UAW, I know you said during dialogue, they have been very public with criticism about the restructuring plan and an increase in their doubling as they see it, and import under the plan. I wonder how you respond to that and if there is any chance that the basics of the plan could be re-examined?

Fritz Henderson

Well, our – I think the answer to the last question is yes. We are in dialogue with UAW, and my view of a dialogue is that it's a good idea to have an open book on all the different subjects. Our plan had, by ’14 about 7.5% of the production for US sales outside of North America is about 235,000 vehicles, and in there that's not just one program, that's half a dozen different programs, but I think this is something that we would want to have a discussion with them about because in general as a matter of policy we have a philosophy of building where we sell, not only do we think that the right thing to do, it is the most profitable thing to do historically. So, you know, we would anticipate having a dialogue about the union concerns at the table.

Operator

And we'll go to David Welch with BusinessWeek. Please go ahead.

David Welch – BusinessWeek

Good morning Fritz.

Fritz Henderson

David, how’re you doing?

David Welch – BusinessWeek

All right. How is it going?

Fritz Henderson

Okay.

David Welch – BusinessWeek

GMAC fared among the worst in the stress test, and it's also going to be to some degree taken on Chrysler plant [ph] business and retail business. What are the plans here to recapitalize it? How are things proved you know, in terms of availability of loan capital for your dealers and customers right now? Talk about that a bit if you can.

Fritz Henderson

A couple of things. First, late last year as part of GMAC becoming a bank holding company, GM agreed to pass over the agreement where, you know, we're obviously we are not involved in GMAC's management of the business. In the end of March, we actually exited the board. So we don't have any, you know, GM members in the GMAC Board of Directors.

So my intimate detail familiarity with GMAC is less than it might have been six months or a year ago. That said, you know, the finding on the stress test was, you know, you saw it. My view is you know, I'm encouraged by GMAC’s ability to bring aboard the Chrysler dealer business as well as the Chrysler retail business over time. I think it can make GMAC more successful, more efficient, and I'm quite confident that GMAC management working with the appropriate regulators will take the right steps to make sure they are well capitalized, and then the final point I’d make is that I think the combination of a more efficient cost competitive GMAC, appropriately capitalized will be a much better source of financing for GM dealers across our brands than it was, you know, let's say last fall when we had serious concerns about what might happen. So we remain encouraged actually by development of GMAC, not that it is a particularly easy situation, but I do sense an endgame here that will result in a much more competitive GMAC to financing GM dealers and our customers.

Operator

And next we’ll go to Jeff Flock with Fox Business Network. Please go ahead.

Jeff Flock – Fox Business Network

Yes. Good morning Fritz.

Fritz Henderson

Hi, Jeff.

Jeff Flock – Fox Business Network

On the subject of potential SEC filings, can you just give me a sense of timetable on that as to when you may file with the SEC with regard to reassurance of stock or how you plan to go forward on that, whether there would be bankruptcy or not.

Fritz Henderson

This one means, we just – we filed our 10-Q last week. We would anticipate updating our S4 for the 10-Q data that was published last week. Other than that, we don't have anything on the docket. So, maybe not a satisfactory answer to your question, but that's the fact.

Operator

And we have a question from Sharon Terlep [ph] with Dow Jones. Please go ahead.

Sharon Terlep – Dow Jones

Hi, Fritz. With the – with salary job cuts, there weren’t specific in the most recent plans. Is there any more to be said about what any further reduction plans might be on that front?

Fritz Henderson

Yes, Sharon, good morning. I would anticipate having, you know, a game plan of announcements by the end of this month on that.

Operator

And we'll go to Jennifer Keiper with Fox News Radio. Please go ahead.

Jennifer Keiper – Fox News Radio

Hi good morning. There was a story moving out there that experts and analysts are saying that GM bankruptcy is almost inevitable, but I wanted to hear what your response was.

Fritz Henderson

Yes, actually I read about the experts and analysts everyday. I would say as I mentioned several weeks ago, certainly given the objectives that we set for ourselves is more probable that we would need to accomplish our goals in a bankruptcy. I'm not going to get into relative percentages and probabilities, but you know, certainly the task that we have in front of us is large. We know, we’d get the job done, but I certainly think today it is more probable that we would need to resort to a bankruptcy process, but there is still an opportunity and still a chance for it to be done outside of a court process.

Operator

And next is Jeff Green with Bloomberg News. Please go ahead.

Jeff Green – Bloomberg News

Hi, Fritz.

Fritz Henderson

Hi, Jeff.

Jeff Green – Bloomberg News

Can you guys – can you say anything more about sort of the scope of the plant closings, and what you're talking about there. I mean, will it still be the plan outline that you need to close or could you, I mean is it possible there will be fewer plant closings, to sort of nullify with the UAW is asking for or is just going to be a case you’re just going to have to explain your position much like you would have to do with the bondholders, and what flexibility did you have to deal with the UAW.

Fritz Henderson

You know, I’d say Jeff in terms of the UAW, the answer is no. I'm not going to go into the details of what the plans are but, as I said I think in any sort of bargaining, it’s wise to approach it with an open book to make sure you understand what the needs are of the company in terms of being competitive and being profitable, and the needs of UAW and our employees. So I approached the dialogue with that kind of openness and we’ll have to see where it goes.

Operator

And we’ll go to Bill Vlasic with The New York Times. Please go ahead.

Bill Vlasic – The New York Times

Good morning Fritz.

Fritz Henderson

Hi Bill.

Bill Vlasic – The New York Times

Hi. Can you tell us what kind of response reaction you may have received from Treasury and the task force on your latest restructuring plan? Have they given you any guidance that the big pieces that you’ve announced, the dealership, the further production reduction -- have they given you guidance that is closer to viability or have they not responded at all?

Fritz Henderson

Bill, the couple of things. One, the task force outlined in GM's case is 60-day process concluding no later than June 1st in terms of their ability to assess our plan and react, respond, adjust, and basically reach their conclusions on our plan. As I indicated, when we updated it and launched our bond exchange, we would not have done so. You know, had we not reviewed the plan with treasury, and their response at that time was you know, I not talking about exact wording but basically they were going to continue to work with the company through June 1st, but we are certainly supportive of the actions the company was taking in terms of launching the bond exchange and the operating measures that were contemplated in that. We are obviously looking at something that has been reviewed in detail. So I guess the way I would answer your question is this is something that I think they will take the remainder of this month to finalize our recommendations and assessment. On your hand, you know, there has been no desire to slow the process or stop implementation. On the contrary, we need to move, you know, we need to move fast. So that's what we've been doing.

Operator

And we'll go to Richard Truett with Automotive News. Please go ahead.

Richard Truett – Automotive News

Good morning Fritz. I have a question for you regarding one of your plans and products. If you were approached by a third party to sell the plant that builds the saucers in the sky. Would you do it kind of like the way Chrysler is trying to sell the Viper plant?

Fritz Henderson

So Richard, you're talking about our Wilmington Delaware plant.

Richard Truett – Automotive News

Right.

Fritz Henderson

I would say, you know, as I said earlier in the call here if someone were to approach us with a proposal that make good sense for our people, we would be open. We are not out actively, you know, trying to market a plant per se, but if some – if the party was interested, we'd be very open to this and would encourage it, and we actually are encouraging as parties look at these brands, and that you know, we would be open to that dialogue. We haven't had any in-bounds on the subject at this point.

Steve Harris

Operator, we have about two more minutes. We'll take two or three questions.

Operator

And we will go to Chris Isabella [ph] with TMC Money [ph]. Please go ahead.

Chris Isabella – TMC Money

Fritz, as you make preparations for a possible bankruptcy filing, are you looking at only US bankruptcy or only North American bankruptcy or is there still a chance that your global operations will be in bankruptcy?

Fritz Henderson

Work continues on that front country by country because this is got to be evaluated country by country. As I said in prior calls it is not a foregone conclusion that a US filing would result in filings in other locations. As a general principle, I think our preference would be to avoid that, but in a number of cases it might be necessary, more to say if and when we get to that point about what we needed to do but at this point the analysis is being done country by country.

Operator

And we'll go to Tom Walsh with the Detroit Free Press. Please go ahead.

Tom Walsh – Detroit Free Press

Hi, Fritz.

Fritz Henderson

Hi, Tom.

Tom Walsh – Detroit Free Press

Just interested in your reaction to the Chrysler holdout lenders deciding to drop their opposition to, you know, in their situation. Does that give you any cause for optimism as you move forward the bond offer that maybe it has a chance of getting to 90%. You're fairly skeptical or not skeptical, but I mean you are aware that there was a long shot I think. But does the Chrysler thing give you anymore hope?

Fritz Henderson

Tom, I got my hands full of GM. As I look at the fact are different. I mean Chrysler I think had 46 secured lenders. We have thousands of unsecured bondholders. Our facts are very different. So I don’t – you know, I pay attention to what’s happening at Chrysler, but I got my hands full here and our facts are different. I think we have time for two more.

Operator

And we’ll go to Jon Leanhy [ph] with Auto Executive Magazine. Please go ahead.

Jon Leanhy – Auto Executive Magazine

Yes, good morning.

Fritz Henderson

Hi, Jon.

Jon Leanhy – Auto Executive Magazine

What’s GM's reaction to dealers lobbying congress against GM's dealer cuts?

Fritz Henderson

I mean, we're going to try to do the right thing for our customers, right thing to be competitive, and try to handle the dealers in the appropriate fashion. I don't really have any further reaction to that. I mean, I think the – our plan has got to sacrifice from a number of parties and it's a challenging environment, very difficult. We appreciate very much the support we've gotten from many of our dealers in terms of what needs to get done here, and we are going to try to handle our dealers in a responsible way directly with them as opposed to through the Congress.

Operator

And we'll go to Michelle Caruso-Cabrera with CNBC. Please go ahead.

Michelle Caruso-Cabrera – CNBC

Thanks for taking my question. You said that once again it was treasury's guidance to give just 10% in your offer to the bondholders. Did they give you a rationale for just 10% and if so what was it?

Fritz Henderson

Michelle, good morning. I mean in terms of the dialogue getting, you know leading up to the bond exchange they felt that was, you know, that was their position. They articulated it pretty clearly. And no, they didn't provide any further rationale or guidance to us other than the fact that they felt this was the right way to handle it. They didn't support us going above 10% in terms of the offer to the unsecured bond holders. So, we went to 10% or we went to the maximum that they permitted us.

Steve Harris

With that operator, I think we will stop there. I want to thank everybody for your questions. Great questions. We covered a lot in the short 30 minutes and I appreciate it, and we'll be back to you when we are ready to talk again. Thanks everybody.

Operator

Ladies and gentlemen, that does conclude your conference. Thank you for your participation. You may now disconnect.

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