GM looks to Volt - and loans

September 17, 2008|Associated Press

DETROIT - On General Motors Corp.'s 100th anniversary, workers cheered as the company revealed the electric-powered car intended to make GM a leader in vehicle technology. But after all the hoopla surrounding the Chevrolet Volt, executives also said a government loan package and access to credit are important parts of GM's next century.

Chief executive Rick Wagoner, speaking to reporters at yesterday's centennial celebration, said turmoil in the financial markets should not affect the package now before Congress.

The $25 billion in loans were approved last year as part of an energy bill and should now be funded to help the industry build next-generation automobiles and meet government fuel economy standards, Wagoner said.

"Really a relatively small fraction of the investment the industry will have to make to achieve these improvements was to be provided for by direct loans," he said. "We're just asking that those loans now be funded and that the rules and procedures . . . be finalized promptly."

GM, Ford Motor Co., and Chrysler LLC have been working to get Congress to fund the loans after months of tight credit markets, tepid sales, and high gasoline prices.

Fritz Henderson, GM's chief operating officer, said the company may have to make further cuts if the loans don't come through and the US auto market doesn't recover. GM has lost $57.5 billion in the past year and a half.

Lutz said GM will be able to develop products like the Volt even if it doesn't get government loans, but the company would prefer to have the financing as it faces a difficult balancing act between spending to meet government regulations and developing new products.