General Motors Corp Chief Executive Fritz Henderson said on Friday the automaker was readying detailed plans for a bankruptcy filing that now appears more likely even as it races to complete a business plan under federal oversight.

Henderson said GM faced no pressure from the Obama administration's autos task force to make a decision on whether to file for bankruptcy before an established June 1 deadline and said it was feasible that the automaker could still avoid bankruptcy despite the short time frame remaining.

But Henderson also said the automaker was drawing up a game plan that would let it emerge as quickly as possible from bankruptcy if it needed to take that route.

Given what we need to accomplish, I certainly felt a couple weeks ago that it was more probable that we would need to go through a bankruptcy process, Henderson told reporters on a conference call. That continues today.

GM, which has been operating under $13.4 billion of emergency U.S. government aid, has not yet received the $4.6 billion of additional funding it had said that it would need to continue operating through the second quarter.

Under the terms of its government rescue, GM has until June 1 to prepare deep cuts in its debt, labor costs, dealership network and brands to return to profitability.

The final call on any bankruptcy will not be GM's alone to make, Henderson said.

This would be one the management and Treasury would arrive at together, Henderson said of bankruptcy.

Henderson, who became CEO when the Obama administration ousted his mentor and predecessor Rick Wagoner at the end of last month, oversees a company that posted $82 billion of losses since 2005.

In wide-ranging remarks intended to provide an update on GM's progress over the past two weeks, Henderson said the automaker has had contact with more than six potential investors for its European Opel brand.

GM shares were down 7 cents of 3.6 percent at $1.87 on Friday afternoon. The stock has lost roughly half of its value since the end of March as investors price in increasing risk of bankruptcy which would be expected to wipe out existing equity.

'TAKING THE WATCH APART'

If GM fails to reach agreements to make deep reductions in some $28 billion of unsecured debt, cut labor costs and rework the funding of a healthcare trust for United Auto Workers union retirees, the automaker could be forced into bankruptcy.

The autos task force, which is headed by former investment banker Steve Rattner, rejected turnaround plans in late March from GM and Chrysler LLC.

The task force has told Chrysler it has until the end of this month to reach agreements for an alliance with Italy's Fiat SpA, a reduction in secured debt and resolution of labor issues with its unions.

The UAW has been negotiating more intensely with Chrysler now because of its looming deadline, Henderson said, adding that GM expected the pace of its talks with the union to pick up in the next few weeks.

Henderson said GM managers had been focused over the past two weeks on working with U.S. officials on a thorough review of the struggling automaker's operations and finances.

That means that we're quite frankly taking the watch apart and then rebuilding it and asking questions, he said.

GM expects to have a new business plan ready by this month, and will then focus on a critical round of talks with the UAW and its bondholders, Henderson said.

Talks with the UAW and GM's bondholders have been largely stalled since February. The two groups are being asked to take equity instead of most of the $48 billion they are collectively owed by the automaker.

Henderson also said the automaker still planned to stick to its four core brands which include Chevrolet, Cadillac, Buick and GMC, but was examining all elements of its brand strategy in its review with U.S. officials.

If GM is forced to file for bankruptcy, it is considering two broad options intended to shorten the length of time the automaker would remain in court protection, Henderson said.

Those options would include reaching agreements with key creditors in advance of a filing or using a bankruptcy code provision to split GM and sell some assets quickly out of bankruptcy, he said.

(Additional reporting by Kevin Krolicki, Poornima Gupta, Soyoung Kim and David Bailey, editing by Dave Zimmerman and Matthew Lewis)

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