General Motors’ bondholders officially challenged the automaker’s viability plan in a rare public letter to President Barack Obama’s task force today, saying it might not keep GM out of bankruptcy.

“While this plan is a step in the right direction, we are concerned that the company is putting too much faith in a near-term turnaround in the economy that would enable annual car and truck sales to reach previous levels,” advisers to the bondholders’ committee negotiating with GM to restructure the company’s debt said in the letter to the task force – another sign of how tense the talks are growing prior to the March 31 deadline for a deal.

While GM has defended its plan as comprehensive and realistic, the bondholders’ letter said: “We do not know if the plan would, in fact, keep the company out of bankruptcy.”

GM’s plan to breakeven is based on a U.S. sales market of 11.5 million to 12 million vehicles being sold annually, with assumptions based on market sales ranging from between 9.5 million to 12 million this year and up to 14 million next year. Last year, U.S. consumers bought 13.2 million cars and trucks in 2008, a decline of 18.3%.

Trying to Negotiate

Today's letter to Obama’s task force also fired back at complaints that GM’s bondholders have been difficult as they negotiate with GM to restructure about $28 billion of the automaker’s unsecured debt.

In fact, the ad hoc committee of bondholders negotiating with said GM has not even responded to their proposal that would meet the requirements of the loan terms.

“Keeping lines of communications open is the only way we all can meet the March 31 deadline for a debt-to-equity exchange,” the committee’s financial advisor Eric Siegert and lawyer Andrew Rosenberg, said in a letter to President Barack Obama’s auto task force.

“We are disappointed that we have had no response to our proposal from either GM or the auto task force,” the letter said, adding that the bondholders’ advisors remain “ready and willing to engage in active negotiations with all parties.”

GM must seek a two-thirds debt-for-equity exchange under the terms of the $13.4 billion U.S. government loans approved in December to keep the company afloat, but the negotiations between GM and the bondholders have been tense, especially as the two sides approach a March 31 deadline to reach an agreement.

The committee, which says it wants to reach a restructuring deal outside of bankruptcy, said they presented the task force with a “framework for constructing a successful debt-to-equity exchange” on March 5 that they believe would both meet the terms of the loan agreement and provide the best chance for acceptance among the diverse group of bondholders.

“Unless the framework we suggested is utilized, the restructuring currently contemplated will not achieve the required level of acceptance to succeed on an out-of-court basis,” the committee wrote. “The result of such a failed exchange would likely be a bankruptcy that would have dire consequences for the company, the tens of thousands of hard-working Americans that GM employs and the economy as a whole.”