(Adds comments from Wagoner, background on industry)
By Kevin Krolicki
DETROIT Jan 11 General Motors Corp (GM.N)
Chief Executive Rick Wagoner said the struggling automaker had
enough funding to last through March but could still seek
additional U.S. government loans beyond the $13.4 billion it
has already been pledged.
Wagoner, speaking to reporters at the Detroit auto show,
also said GM was still seeking a potential buyer for its Saab
brand. "We're still looking," he said.
GM had warned that it was at risk of running out of cash
before the Bush Administration cleared its request for
emergency funding just before the end of the year.
In recent weeks, some reports have said GM executives
believed the $13.4-billion in U.S. government loans would allow
the automaker to survive even under its most dire forecasts for
the U.S. market in 2009.
But Wagoner indicated GM could still opt to seek additional
funding after a March review with U.S. officials intended to
assess its progress in restructuring.
"The $13.4 billion is consistent with what we asked for
through the first quarter under our downside market scenario,
which is the way the market is running," Wagoner said.
"We will obviously review the whole plan and at that point
we'll see what requirements are. But for now we think we're
well covered through the period we asked to be provided," he
Under the terms of GM's loan, the automaker faces a March
deadline to demonstrate to U.S. officials that it can be viable
based on winning steep concessions from bond holders and the
United Auto Workers union.
GM has set a goal of reducing its debt by almost $36
billion by asking bond holders to swap out of existing debt for
shares and by negotiating new terms for its promised $21
billion contribution to a trust fund for retiree health care
that will be run by the UAW.
The loan program as structured by the Bush administration
requires GM to seek to cut its debt by two-thirds and to
negotiate sweeping changes to its UAW contract. UAW in 2007
made landmark givebacks to the industry, including GM.
This would include making its work rules and wages
competitive with non-union U.S. plants run by Japan's major
automakers, led by Toyota Motor Corp. (7203.T).
But the UAW has objected to those terms as unfair, and a
bill backed by Democratic leaders in the House of
Representatives would strip the requirement for steep UAW
givebacks from the auto bailout program.
GM is set to begin talks with representatives of the UAW
this week in Detroit.
"I think it's fair to say everyone's attitude has been
cooperative," Wagoner said.
But the GM CEO stopped short of saying GM would be able to
meet the specific targets for UAW concessions as outlined by
the Bush administration.
"They are defined as targets, and it's indicated the
importance of being competitive, and it's my sense that we can
do what we need to do," he said.
Wagoner said GM and the auto industry stood to benefit if
the incoming Obama administration's plans for fiscal stimulus
included some new tax credits or other support for car buyers.
"These kinds of things could be helpful and I think this
issue of consumer confidence goes well beyond the auto
industry," Wagoner said.
GM borrowed $4 billion from the U.S. government on Dec. 31
and is eligible for another $5.4 billion on Jan. 16 and a final
$4 billion loan installment on Feb. 17.
U.S. auto sales tumbled 18 percent in 2008, and GM's sales
dropped 23 percent.
(Reporting by Kevin Krolicki, editing by Maureen Bavdek and