Articles | GM urges Congress to pass loan deal

GM urges Congress to pass loan deal

Published: Wednesday, 12 November 2008, 10:45PM

General Motors has asked all its US dealers to urge the Congress to approve an additional loan package to help the carmaker deal with its liquidity crisis, according to dealers briefed on the matter

GM US sales chief Mark LaNeve told dealers to call their representatives and senators to ask them to support GM and the car industry, saying 3 million jobs are at risk if the industry does not receive urgent government funding.

"As we're in the midst of the deepest crisis our industry has ever faced, GM's priority is on seeking support from various US government agencies and congressional leaders," Mr LaNeve said in a letter to dealers.

Separately, GM executives also held a broadcast for employees on Wednesday, urging them to contact their representatives and senators in support of any measures to provide immediate liquidity to the US auto industry, a GM employee said.

Mr LaNeve said GM needed the quick appropriation of the first $25 billion loans already approved by Congress and needs a second package of another $25 billion in loans to "weather the storm," a dealer said

Cash-strapped GM said last week it is approaching the minimum level of liquidity needed to run its operations and could run out of cash by early next year.

GM, Ford Motor Co and Chrysler are all burning through cash amid a global credit crunch that has accelerated the decline in US car sales and placed severe limits on corporate and consumer borrowing.

Chief executives of the three car manufacturers met US House Speaker Nancy Pelosi and Senate Majority leader Harry Reid last week to discuss a comprehensive aid package of $50 billion - with half directed as emergency capital.

The second $25 billion, to be considered later, would go to a retiree healthcare trust fund to free up cash for other priorities.

US lawmakers have said in recent days that they might support efforts to aid the struggling industry.