General Motors is projected to default on its next bond payment—the last before the June 1st government-imposed restructuring deadline. Next freeway exit: bankruptcy.

From the Wall Street Journal:

GM Chief Financial Officer Ray Young - who told reporters that the auto maker had no plans to meet the June 1 interest payment - may have done investors a favor by reminding everyone of the harsh reality ahead.

"People should be getting the sleep out of their eyes and seeing it's over," said Marilyn Cohen, president of retail bond investment manager Envision Capital. "I would imagine they're going to file any minute...Not making a payment - it's going to show them that this time, they mean it."

Later this week, GM will also announce its plans to idle fifteen plants in North America for at least a week (but likely most of the summer) and going through with other planned cutbacks sooner than originally planned.

As GM Plans Bond Payment Miss, Last Vestiges Of Hope Fade Away [WSJ]
GM Said to Idle 15 Assembly Plants in May-July Period [Bloomberg]
GM Said to Speed Cutbacks to Lower Break-Even Point [Bloomberg}

Photo: JM3