[Mr. Wyndham]

Wagoner: GM ready with plan for survival
Robert Snell / The Detroit News

DETROIT -- General Motors Corp. CEO Rick Wagoner declined to say Thursday whether the automaker has retained bankruptcy counsel and denied receiving assurances from U.S. Treasury Secretary Henry Paulson that GM could receive short-term funding in anticipation of a larger loan.

"I didn't get any wink or a nod from anybody," Wagoner, 55, said during an interview with The Detroit News.

There had been speculation on Capitol Hill and among the automakers that Paulson was helping craft a potential short-term loan for GM until more funds could be obtained as part of a broader federal aid program for automakers.

Retaining bankruptcy counsel would signal the automaker is considering filing for court protection from creditors. Wagoner said Wednesday that bankruptcy is not an option because revenues would dry up and GM likely would have to liquidate.

Consumers are generally reluctant to buy big-ticket items like cars from a bankrupt company. A filing also could trigger adverse market reactions and demands from suppliers and lenders.

Wagoner spoke Thursday hours after congressional leaders asked Detroit's Big Three automakers to present a plan by Dec. 2 for restructuring their businesses and how they would spend $25 billion in government loans.

The carmakers will have to provide reports to the Senate Banking Committee and House Financial Services Committee on how they would use the money to remain viable.

'We've got the plans'
Democrats had been pushing for automakers to receive a $25 billion piece of the $700 billion Wall Street bailout while Republicans and the White House favored taking the money from an Energy Department loan program funded in September. The GOP proposal dropped restrictions that the money be used to retool factories to build more fuel-efficient vehicles.

GM is ready to respond with detailed plans that will address congressional concerns about the automaker's viability and show the company can survive and pay back taxpayer-funded loans, Wagoner said.

He did not, however, offer any details on what GM's plan might entail. "We've got the plans and are ready to go," Wagoner said. "We're not starting from ground zero here."

Lawmakers not convinced
GM's quest for aid comes as the automaker copes with falling sales and dwindling cash reserves, a situation that has prompted the company to warn it might not have enough money to meet minimum funding requirements early in 2009.

The demands from Washington came after Wagoner and the CEOs of Chrysler LLC and Ford Motor Co. spent two days testifying on Capitol Hill about the need for immediate aid -- a request that was rebuffed Thursday when House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., said the auto executives failed to convince lawmakers they deserved the investment.

The latest developments mean the automakers might have to wait until January before receiving any aid, if at all.

Another delay "is something that would be a bit nerve-racking for us," Wagoner said, "but it's the reality we face."

Bankruptcy filing risky
Wagoner has previously testified on Capitol Hill. This time, he said, comments from some lawmakers exhibited a good understanding of the industry, while others reflected an outdated perception. "It was a little more hostile than I might have expected," Wagoner said.

Wagoner reiterated concerns that filing bankruptcy would be risky and could lead to a meltdown of the auto industry.

"Why would you take that risk at a time when the economy is teetering on the brink," he said.

"We need to do everything we can to get the business structured to get through a tough time and onto the future."

After listening to lawmakers, Wagoner said there is some agreement -- though not a consensus -- that the auto industry needs to survive and that taxpayers need to be protected if Congress provides a loan.

"What's not so clear is how that support should be provided," he said. "We need to make sure the auto industry contributes to the resurgence of the U.S. economy rather than contributes to driving it into a deep, deep recession."

A day after Wagoner and the other CEOs endured needling from lawmakers about traveling to Washington on corporate jets and then asking for a loan, the GM executive didn't disclose his travel plans for a likely return trip to Washington next month.

"We haven't decided how we're going to go down there," he said. "It may surprise some people."

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