GM lobbying for bailout, Journal says

Citing people familiar with the situation, the Journal said on its Web site that GM's auto-industry bailout lobbying effort in Washington was reaching out to congressional leaders, the outgoing Bush White House and members of the transition team of President-elect Barack Obama, with meetings going on over the weekend.

Central to the campaign is the idea that a bankruptcy filing by GM would trigger a domino effect, crippling the nation's industrial base, the paper said.

Detroit automakers have sought emergency assistance to help them survive a steep drop in sales that they blame on the global credit crisis and slumping economy. GM has said it could run out of cash by early next year.

Democrats are proposing a bailout of distressed automakers through $25 billion in loans from the Treasury Department's $700 billion rescue program.

The White House opposes that move and says that $25 billion already appropriated for loans to make automobiles more fuel-efficient should be accelerated.

According to the newspaper, GM is arguing that bankruptcy would threaten jobs and the government's pension-benefit insurance arm, which covers millions of workers outside the auto industry, by swamping the fund and further burdening the federal budget.

"There is no Plan B being discussed beyond a government bailout," the Journal quoted one top GM adviser as saying on Friday. Another person close to the company said executives recently told the board they were "increasingly optimistic" GM would receive a liquidity infusion before December, it said.

GM is also flooding dealers, supplier executives, employees and union members with letters encouraging their participation in the effort, the newspaper said.