Potential GM bankruptcy plan includes company split

NEW YORK (Reuters) - A possible bankruptcy plan being discussed for General Motors Corp includes quickly forming a new company of the automaker's most profitable parts, while a group of other units would remain under bankruptcy protection, a source told Reuters on Tuesday.

Under the plan, old components not included in the new GM, such as Saturn and Hummer, would remain in bankruptcy over a longer period of time to be sold or wound down, said the source.

The U.S. automaker hopes to avoid a bankruptcy filing but is preparing for Chapter 11 under the U.S. bankruptcy code by June 1, said the source. The company has 60 days to reach deeper concessions with bondholders and United Auto Workers union after its previous restructuring plan was rejected by the U.S. government as insufficient.

GM hopes to have a new deal with the union before any possible bankruptcy filing, said the source.

(Reporting by Emily Chasan, Chelsea Emery and Tom Hals.)