GM needs help by New Year’s

The head of General Motors told reporters that his
company needs help from Washington before the end of December to stave off
bankruptcy, which auto companies have warned would devastate the economy.

“That’s the timeframe,” GM Chief Executive Officer Rick
Wagoner said Thursday morning just before a Senate Banking panel hearing on the
automobile industry’s pleas for help.

{mosads}Wagoner also expressed confidence in the plan GM put
forward on Tuesday, saying it reflected a move by the country’s largest car
company to adjust to a smaller market.

Wagoner spoke with congressional supporters of the
industry from Michigan, who noted that other countries have taken steps to help
their industries. Automobile companies in Europe and Japan have also seen sales
slide because of a slowing international economy.

Sen. Carl Levin (D-Mich.), who has tried to forge a
bipartisan deal in the Senate to help the industry, said U.S. companies are not
unique in seeking support, but are unique in not finding support from the
government. He noted the French government offered help on Thursday to Renault
and Peugeot.

“It’s not a Michigan issue, but a national and international
issue,” said Rep. Sander Levin (D-Mich.), the senator’s brother. He warned of a
ripple effect if even one of the Big Three collapsed, arguing it could cause
suppliers and other auto companies to go out of business.

Rep. Levin, who said he was optimistic that lawmakers would
provide help for Detroit, also said the country’s banks could be hurt by the
failure of one of the Big Three. He and other supporters of the auto industry,
including Democratic leaders in Congress, have called on the government to use
a portion of the $700 billion bailout for the financial industry to help
Detroit, but the White House and many congressional Republicans object to that
plan.

In its testimony to Congress today, Ford CEO Alan Mulally
notes that Goldman Sachs has estimated a possible $1 trillion impact from the
bankruptcy of one of the Big Three.

The Big Three are asking for a combined $34 billion in
loans from Congress, but appear to face an uphill struggle. Many lawmakers have
expressed reservations about providing money to Detroit, and some Republican
leaders believe bankruptcy is a better option.