GM almost out of cash

General Motors Corp. could run short of the cash it needs to operate if Congress doesn’t approve $4 billion in loans this month, the automaker said today in a 30-page report requesting federal aid.

“The first $4 billion is crucial," President and Chief Operating Officer Fritz Henderson said. “Absent support, we can’t continue to operate."

GM is asking the federal government for a $12-billion term loan and a $6-billion line of credit to ensure adequate conditions through 2009.

The automaker is requesting $4 billion to ensure “minimum liquidity levels through Dec. 31." And said it plans to ask for up to $4 billion to ensure adequate liquidity balances through January and a third draw of up to $2 billion in the “February-March" time frame, based on recent market developments for a total draw of $10 billion by the end of the first quarter.

That plan is based on expected U.S. total vehicle sales of 12 million next year.

However, if the industry were to worsen 10.5 million sales next year, he said, the automaker would need more aid, so it has also requested the federal government make available a $6-billion line of credit to ensure liquidity should U.S. auto sales be even worse than expected.

[Editor's Note: And how does GM expect to pay back this huge loan given it has had to sell off some of its moneymaking divisions and car sales that will not pick up for a very long time?]