GM Needs a Hand From Unions, Lenders

Automaker scrambles to retrench ahead of Congress' deadline
By Jim O'Neill,  Newser User
Posted Nov 24, 2008 9:43 AM CST
Senate Majority Harry Reid of Nev., center, flanked House Speaker Nancy Pelosi of Calif., left, and Sen. Patty Murray, D-Wash., gestures during a news conference on Capitol Hill, Thursday,Nov. 20.   (AP Photo/Gerald Herbert)
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(Newser) – General Motors is revving up its efforts to prove to Congress it can survive if it receives a multibillion-dollar federal loan, reports Bloomberg. The automaker is asking unions to ease work rules, attempting to reduce its debt load, and considering cutting brands from its lineup as it tries to stretch its remaining cash. The company has a week to present a plan to lawmakers.

The specter of the B-word—bankruptcy—haunts the company, which is carrying $43 billion in debt and burns through at least $11 billion per month in operating costs. "A financial restructuring, along with government loans, is an alternative to bankruptcy," says an industry analyst. "It doesn’t fix the economic environment, though, and it’s the economic conditions that are causing their cash burn."