Nov. 13 (Bloomberg) -- General Motors Corp., seeking a U.S. federal bailout to stay in business, is having a harder time selling $4 billion in assets after saying it may run out of cash, according to people familiar with the negotiations.

Potential buyers are concerned that the units, including the Hummer sport-utility vehicle brand, would lose value should GM fail, said the people, who asked not to be identified because the talks are confidential. The divisions being unloaded all would rely on Detroit-based GM as a partner after a sale.

``With the specter of bankruptcy looming over GM, there probably isn't a much more difficult environment in which GM could try to make these sales,'' said Pete Hastings, a fixed- income analyst with Morgan Keegan Inc. in Memphis, Tennessee. ``They may get someone to take these assets off their hands at a fire-sale price, but that's largely dependent on a bailout.''

Shedding assets was a pillar of GM's plan to boost cash by as much as $20 billion by the end of 2009. Available cash at the end of September fell 23 percent from the end of June, eroding the savings from job cuts and factory closures and helping spur GM to ask for $25 billion in loans for the U.S. industry.

The largest U.S. automaker hadn't found buyers for Hummer, the ACDelco replacement-parts unit or a French transmission plant before saying Nov. 7 that it may not have enough operating cash to last through the end of the year without federal aid.

`Whole Other Level'

``What this does is just layer a whole other level of uncertainty on a transaction,'' Warren Feder, a partner at Carl Marks Advisory Group LLC in New York who has advised companies considering bankruptcy, said in an interview.

A GM spokesman, Tony Cervone, wouldn't name any suitors yesterday, say how much the automaker expected to receive for the three units or specify other assets being considered for sale to meet GM's liquidity goal.

``We are approaching any discussions with the assumption that GM is going to be here for a long time,'' Cervone said. GM has said bankruptcy isn't an option under consideration.

Asset sales by General Motors ``will be very challenging given the current business and credit environments,'' the carmaker said in a Nov. 10 regulatory filing. ``Moreover, the full impact of many of these actions will not be realized until the second half of 2009 or later, even if they are implemented successfully.''

Last quarter's $6.9 billion cash burn cut GM's reserves to $16.2 billion as of Sept. 30. The automaker says it needs $11 billion to pay its monthly bills and has reported almost $73 billion in losses since 2004, its last annual profit.

Aid Request

GM's dwindling cash underscored the urgency of its request for federal aid. GM, Ford Motor Co. and Chrysler LLC would receive $25 billion from the Treasury's Trouble Asset Relief Program under a proposal yesterday from House Financial Services Committee Chairman Barney Frank.

GM fell 13 cents, or 4.2 percent, to $2.95 at 4:06 p.m. in New York Stock Exchange composite trading. The company's 88 percent plunge this year is the most among the 30 stocks in the Dow Jones Industrial Average.

JPMorgan Chase & Co. estimated today that GM may need as much as $30 billion in U.S. aid into 2010, while Goldman Sachs Group Inc. projected the automaker's requirement for new capital at $22 billion.

Goldman Drops Coverage

Goldman dropped its coverage of GM shares because ``there is not currently a sufficient basis for determining an investment rating or price target for this company,'' analyst Patrick Archambault wrote in a research note.

JPMorgan's Himanshu Patel cut his GM rating to ``neutral'' from ``overweight.''

Financial data on GM's Strasbourg, France, plant and on Hummer have been distributed to prospective buyers, and the carmaker is preparing information on ACDelco, Cervone said. GM has hired Merrill Lynch & Co. and Citigroup Inc. to help with the disposals.

Purchases of Hummer SUVs fell 49 percent this year in the U.S., the biggest decline among any brand across all automakers. The unit's vehicles are assembled at plants in Indiana, Louisiana, South Africa and Russia.

The French plant makes six-speed automatic transmissions for Cadillac CTS sedans, vehicles made by the company's Shanghai GM unit and Bayerische Motoren Werke AG, a spokeswoman, Sharon Basel, said in an interview.

Batteries, Filters

ACDelco, with annual revenue of about $1.5 billion, makes parts such as batteries, oil filters and windshield wipers, and employs about 600 people.

GM is also considering another attempt to sell its medium- duty truck business, which makes the Chevrolet Kodiak and GMC TopKick, after a transaction with Navistar International Corp. fell through in August. The sale wouldn't count toward GM's liquidity goal.

The automaker spun off its Delphi Corp. parts unit in May 1999. Troy, Michigan-based Delphi, GM's largest supplier, has been struggling to exit a bankruptcy case that began in 2005.

In a court filing yesterday, Delphi sought to postpone a hearing on changes to its turnaround plan to Dec. 17. It had been set for Oct. 23.

To contact the reporters on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net; Zachary R. Mider in New York at zmider1@bloomberg.net

Last Updated: November 13, 2008 16:18 EST