Fritz Henderson says he’s “not worried” about the government’s eye on him as he restructures the bankrupt giant.

General Motors CEO Fritz Henderson says he feels the government’s eye on him as he works to make General Motors “a product- and customer-focused company” and emerge from bankruptcy. In an interview with online news site The Daily Beast, Henderson said the U.S. government is watching GM’s actions very closely, or as he put it, “I’m on a short leash, but I’m not worried.”

Henderson said GM will be cutting its executive ranks, with a 35 percent reduction planned by the end of the year compared with the end of 2008, although he did not give specifics. He also said the company’s top priority is going to be to pay back the U.S. Treasury and the Canadian government and to “pay the highest possible return on their equity.” He vowed that GM will “create real market value” for shareholders.

In a telling expression of the changed mood at General Motors, Henderson said, “No one wants to be a behemoth….we want to win and do it profitably.” He described the future for the automaker as “a power-sharing environment.”

The interview preceded General Motors’ appearance in Federal Bankruptcy Court, looking for approval of its turnover to the government. Henderson testified on Tuesday for several hours. The company is hoping to have the sale approved by July 10.