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General Motors' new chief executive officer says it is "more probable" that the corporation is heading for bankruptcy but that there is still a chance that it can be avoided.

Fritz Henderson, speaking at one of the now-regular media briefings today, said the group had reopened negotiations with the UAW union, whose co-operation is crucial to its survival. The group has until 1 June to prove its viability to the US Treasury team.

Henderson said: "It's more probable that we would need to accomplish our goals in a bankruptcy. But there's still a chance for it to be done outside a court proceeding."

The UAW is a creditor of GM and while it may be willing to swallow the dilution of its stake, smaller bondholders are proving resistant, which may force the corporation to seek the shelter of bankruptcy.

The union has already expressed reservations, though, about parts of the restructuring plan that involve importing more vehicles from plants in lower-cost countries such as Korea and Mexico.

In the briefing, Henderson also revealed that GM could seek to leave its Detroit headquarters in the restructuring exercise.