DETROIT
On its 100th anniversary, General Motors workers cheered as the company revealed yesterday the electric-powered car intended to make GM a vehicle- technology leader. But after all the hoopla surrounding the Chevrolet Volt, executives also say that a government loan package and access to credit are important parts of GM's next 100 years.
Chairman and CEO Rick Wagoner said that the recent turmoil in the financial markets should not affect the loan package now before Congress. The $25 billion in loans were approved last year as part of an energy bill and should now be financed to help the industry build next-generation automobiles and meet government fuel-economy standards, he 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," Wagoner said. "We're just asking that those loans now be funded and that the rules and procedures to be able to draw against those loans be finalized promptly." GM, Ford Motor Co. and Chrysler LLC have been working to get Congress to provided the money for the loans after months of tight credit markets, tepid sales and high gasoline prices.
If the government loans don't come through and the U.S. auto market doesn't recover, GM may have to make further cuts, chief operating officer Fritz Henderson told reporters.
The company may also have to cut more costs if the credit markets remain tight, Henderson said. GM's liquidity plan calls for $10 billion in internal cuts and an additional $5 billion through asset sales and borrowing.
Henderson said he is confident that GM will be able to hit those numbers, but said he could not predict what will happen in the credit markets, which affect consumer as well as corporate borrowing.
Wagoner showed off the production version of the Chevrolet Volt, which will be able to go 40 miles on a single charge from a home outlet.
He said that GM has been testing the car's new lithium-ion battery packs and is confident in their performance.
"General Motors' second century starts right now," he said as Vice Chairman Bob Lutz drove the four-passenger sedan onto a stage at GM's world headquarters.
Lutz told reporters that GM will be able to develop products even if it doesn't get the 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.
"Obviously it's clear that government loans would take a lot of the stress off," he said.
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