Wagoner confident GM will meet challenges

General Motors Corp. Chairman and CEO Rick Wagoner said today that the automaker expects to receive the first payment from federal loans by Dec. 29 and that the company will now turn its attention to rapidly implementing its restructuring plan.

"We look forward to proving what American ingenuity can achieve," said Wagoner, who said he is "highly confident" GM can work with its many stakeholders to meet the viability tests outlined in the terms of the federal loans approved this morning by the Bush administration.

Wagoner said GM provided a lot of additional financial information to the administration during the past week, but said there was little interaction between the White House and GM from Tuesday until late Thursday night, when the administration shared its proposal for aid.

Many GM employees worked with the administration through the night to finalize loan terms, Wagoner said, which explained chief financial officer Ray Young's appearance at today's news conference in the same suit he wore to work Thursday morning, Wagoner said.

The White House and GM, he said, finalized terms of the loan at 8:56 a.m., Wagoner said, just minutes before President George W. Bush announced approval of $17.4 billion in loans to help GM and Chrysler pay their bills and restructure in the first quarter of the year. GM is eligible for $9.4 billion immediately and Chrysler will get $4 billion.

GM may apply for another $4 billion in February if Congress releases the second half of a $700-billion Troubled Asset Relief Program that was originally intended to assist financial companies.

The companies have until March 31 to prove they have a plan to become profitable, or they will be forced to repay the loans.

GM and Chrysler requested the loans after the the global credit markets seized and U.S. auto sales plummeted earlier this fall. The companies said the drastic economic downturn put them in danger of not being able to pay their bills by January. Analysts and people familiar with planning have said the companies were poised to run out of enough cash to operate by the first week of January.

The companies have said that a bankruptcy reorganization was not an option, arguing that restructuring financing is not available in this economy and that consumers would not purchase vehicles from a bankrupt automaker.

Wagoner said the company was pleased that the government hadn't pursued an option of forcing GM to do its restructuring through a prepackaged bankruptcy. Wagoner also said he plans to remain at the company to lead it through the restructuring progress.

"Do you think I would have gone through what I've gone through in the past two months, if I didn't want to stay?" Wagoner said. "We are more energized than ever now that we have the funding we need to go ahead with our plans.

"Our industry helped build this country," Wagoner said. "Today our mission is to help lead the company out" of this recession.

Original Story - Detroit Free Press

GM - Press Statement 12-19-2008 PDF