Aug. 14 (Bloomberg) -- General Motors Corp., seeking to speed up the restructuring plan unveiled last month, said it may be able to reap more of the $10 billion in projected savings this year instead of in 2009. GM rose the most in a month.

The slumping U.S. auto market also may force GM to rethink some of its strategies for the GMAC LLC finance unit and the creation of an independent union retiree health-care fund, Chief Financial Officer Ray Young said late yesterday at a JPMorgan Chase & Co. automotive conference in Dearborn, Michigan.

Faster savings would afford Chief Executive Officer Rick Wagoner more flexibility under the plan he announced July 15 to boost liquidity by as much as $17 billion. The moves will give GM the cash to operate through next year, Wagoner has said.

``We're accelerating all of this stuff,'' Young said. ``We hope to realize a lot of the savings this year compared to our original plan we developed back in July.''

Young's comments in a Webcast presentation came after Moody's Investors Service lowered GM's credit rating to Caa1, one step further into junk status, on concern that falling U.S. sales will hurt efforts to improve cash flow at the world's largest automaker.

Among the savings that may be accomplished in 2008 instead of 2009 are some of GM's capital-spending reductions and 10 percent of the cutbacks in the salaried payroll, Young said. Detroit-based GM hasn't said how many salaried jobs it is cutting.

Analyst's View

Concerns that GM may have to file for bankruptcy are overdone, JPMorgan analyst Himanshu Patel in New York wrote in a report today after participating in the briefing.

``Our broad view remains that the chances of a GM bankruptcy during this auto cycle are lower than what is currently discounted in the marketplace,'' wrote Patel, who rates the shares as ``overweight.'' There are ``many obvious concerns regarding the company's balance sheet and near-term operating outlook,'' he said.

GM gained $1.09, or 11 percent, to $11.35 at 4:15 p.m. in New York Stock Exchange composite trading. That was the biggest advance among the 30 companies in the Dow Jones Industrial Average.

GM had projected that all the benefits from capital- spending and structural-cost cuts would come next year, along with 60 percent of the savings from delaying a payment to a union retirement fund, Young said. GM will save about $800 million over the two years by suspending a 25-cents-a-share quarterly dividend.

Emerging Markets

Growth in emerging markets will continue to help offset losses in North America and new products will be cheaper to build, Young said. GM has lost $69.8 billion since the end of 2004, its last profitable year.

The $1 billion GM tapped from a revolving line of credit, announced as part of the $15.5 billion second-quarter loss, was meant to ``test the mechanism'' of that borrowing and help meet costs at a ``seasonal low point,'' Young said.

When asked when that loan would be repaid, Young said GM will monitor the U.S. auto industry's performance over the ``next couple months'' and didn't give any timing.

The automaker burned through $3.6 billion in the second quarter and said Aug. 1 that its supply of cash, marketable securities and other funds available fell to $21 billion on June 30 from $23.9 billion at the end of the first quarter.

Should the U.S. auto market shrink further, GM eventually may have to reconsider the union-run fund for U.S. retiree health-care benefits being created under the 2007 contract with the United Auto Workers, Young said, without giving details.

Union Health Fund

Union members at GM agreed Oct. 10 to let GM pay $31.9 billion into a Voluntary Employee Beneficiary Association, or VEBA, to cover a $47 billion health-care liability. A U.S. judge in Detroit on July 31 granted final approval of the plan, barring any appeals.

``We have a contractual obligation right now, with the UAW; we talked to them a lot about that, that we're going to honor that obligation,'' Young said. ``But again if the world changes, it's not just the UAW VEBA, it's going to be a lot of things we're going to have to look at.''

GM also is assessing ``how strategic'' GMAC will be in the future, Young said, without elaborating. He said the current credit environment means GM is entering ``another stage'' of its relationship with GMAC after selling a 51 percent stake in the lender in 2006 to Cerberus Capital Management LP.

GMAC's lack of an investment-grade credit rating and cutbacks in auto leasing are among the considerations in the automaker's deliberations, Young said.

GM's own debt is now rated seven levels below investment grade by Moody's. Standard & Poor's cut GM to B-, six levels below investment grade, on July 31.

GM's 8.375 percent bond due July 2033 fell 0.5 cent to 52.5 cents on the dollar, according to Trace, the bond-price reporting system of the Financial Industry Regulatory Authority. The yield rose to 16.25 percent.

To contact the reporter on this story: Jeff Green in Southfield, Michigan, at jgreen16@bloomberg.net

Last Updated: August 14, 2008 16:28 EDT