GM Generali

Generali (AQEU:GM)
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General Motors Corp. (GM) issued early paychecks this week to all workers in a move the auto maker said is intended to calm employees who fear they won't get paid if the company files for bankruptcy.

Employees' pay would not be at risk in a bankruptcy, but the company wanted to reassure workers they will get their checks, GM spokesman Tom Wilkinson said Wednesday.

Around 90,000 U.S. hourly and salaried workers will get paid three days early this week. GM mailed or direct deposited the checks Tuesday rather than Friday as regularly scheduled.

"This was purely psychological" Wilkinson said. "Everybody is just very anxious."

GM faces almost certain bankruptcy after it failed to get bondholders to agree to swap $27 billion in debt for equity in a restructured GM. The bond exchange expired late Tuesday.

The U.S. Treasury, keeping GM alive on federal loans, gave the auto maker until Monday to become viable or file for Chapter 11 protection.

Wilkinson said employee pay would not be at risk should GM enter bankruptcy. One of the first courses of action would be to ensure workers are paid so the company could continue operating.

GM also planned to make critical payments to its direct-material suppliers early and ahead of Monday's deadline. The company told suppliers earlier this month it will pay them on May 28 instead of June 2, a move it said was made due to a flood of economic uncertainty in the industry and to support struggling suppliers.

-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@dowjones.com