General Motors (GM) will probably fall into bankruptcy, its chief executive warned again yesterday, as the clock ticks down to the June 1 deadline set by the US Government for the ailing carmaker to convince it that it can restructure successfully.

Fritz Henderson said that, given the scale of GM’s rationalisation programme, it was always more likely that the carmaker’s aims would be achieved in bankruptcy. “It is more probable that we need to resort to bankruptcy, but it is still possible that we can do it outside,” he said. The company is surviving on $15.4 billion (£10.2 billion) of emergency loans from Washington.

Mr Henderson said that bankruptcy filings in other countries where GM had operations would not necessarily follow. Each country would be considered on its own merits.

The carmaker has said previously that its European operations, which include Opel, in Germany, and Vauxhall, in Britain, had enough liquidity to take them through to the end of June. Talks are continuing with a number of bidders, including Fiat, the Italian carmaker.

Fiat’s involvement has raised concerns that Vauxhall factories in the UK could be closed. It was reported that Fiat has already drafted a plan to shut several factories, including operations in Britain.

Mr Henderson offered no reassurances on the future of Vauxhall. He said that he could not go into detail about what other parties may plan for GM Europe, but added that its plants – the car factory at Ellesmere Port, Merseyside, and the Luton van operation – had performed well. GM will continue to have a stake in the European business, although this is expected to be a minority holding.

Mr Henderson was also tight-lipped on whether GM would offer other assets to Fiat, such as its Latin American division, to secure a deal.

Yesterday it was reported that Saab, GM’s Swedish business, has received letters of intent from two or three potential bidders. Fiat has already said that it is interested in buying the company, which was cut free of its American parent earlier than the other European operations.

GM Europe has said that it needs €3.3 billion (£3 billion) in state aid from European governments.

In the United States, GM is talking to two potential buyers for Hummer, its sports utility vehicle division, having originally received three offers. In the case of its Saturn business, Mr Henderson said that he would be happy to talk to bidders who wanted to continue manufacturing in the United States.

— Car sales in China, which in January overtook America to become the world’s biggest automotive market, rose 37 per cent last month, compared with April 2008. Total vehicle sales, including lorries and buses, rose 25 per cent to 1.15 million. April’s figures have been boosted by the Government’s offer of a tax incentive to buyers of smaller cars.

India also reported a rise in car sales, fuelled by factory-gate tax cuts and lower borrowing costs. Car sales for April increased 4.2 per cent to 102,900, making it the third consecutive month to show an increase.

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