Nov. 10 (Bloomberg) -- General Motors Co. Chief Executive Officer Fritz Henderson has the board’s backing and the automaker may repay some of its $50 billion in U.S. bankruptcy aid this year, Chairman Ed Whitacre said.

“It’s conceivable we could pay back some of the loans before the end of the year,” Whitacre, 68, said in an interview in his office in Texas as he prepared for a speech tonight near San Antonio on the state of the auto industry. Whitacre declined to commit the company to an initial public offering next year.

GM is working to rebuild its image after filing for Chapter 11 protection June 1 in the wake of $88 billion in losses since 2004. The Obama administration named Whitacre, the former CEO and chairman of Dallas-based AT&T Inc., to lead the board after a U.S. bailout gave the government a 61 percent ownership stake.

“We have some momentum now, there’s a lot of enthusiasm,” Whitacre said. “We’re all cautiously optimistic. The board is fully behind Fritz; he’s working hard.”

Henderson, 50, became CEO in March when the government asked Rick Wagoner to step aside. GM’s board was told by the Treasury’s auto task force at an Aug. 3 meeting that Henderson has a 40 percent to 60 percent chance of fixing the automaker, a person familiar with the briefing said at the time.

The task force recommended that GM improve his odds by hiring more outsiders, that person said. Directors were told that GM is too insular, has too little accountability and lacks urgency in decision making, the person said after the meeting.

No Rush

Whitacre said GM isn’t rushing to hire outside executives for its restructuring. GM has made several “inside” changes recently and the move to bring in new blood will be “meted out slowly,” he said, without giving timing.

The automaker is trying to build on its results in October, when its monthly U.S. sales rose for the first time since January 2008 and market share topped 20 percent.

“One month does not a trend make, but we’re hopeful about November,” Whitacre said. “We’re pleased, but it’s still pretty slow going out there.”

GM sales of cars and trucks rose 6.6 percent in October as sales recovered from the hangover of the government’s so-called cash for clunkers program. GM had about 21 percent of the U.S. market, according to industry researcher Autodata Corp. in Woodcliff Lake, New Jersey.

The automaker, based in Detroit, is cutting its U.S. brands from eight to four as part of the government restructuring. The automaker is retaining Chevrolet, Cadillac, Buick and GMC.

‘Sell More Vehicles’

GM hasn’t set a specific market-share goal, and doesn’t want to add significantly to incentives, he said. “We are just looking at ways to sell more vehicles and it’s a very competitive market. We need to strike a balance.”

Steven Rattner, former head of President Barack Obama’s automotive task force, said Oct. 21 that a successful recovery for GM and Chrysler Group LLC, which also was restructured in a U.S.-backed bankruptcy, is “far from assured” and will take time.

For GM, “the over-arching question mark is whether without an infusion of new blood its management team can implement the massive cultural change that is needed,” Rattner said during a speech sponsored by the Brookings Institution, a Washington- based public policy group.

Henderson, who took over after Wagoner’s ouster, “conveyed more energy and openness to change,” Rattner wrote in a Fortune Magazine article the same day as the speech. “While nervous about whether Fritz could bring the change GM desperately needed, I was considerably more nervous about the likelihood of recruiting a thoroughbred CEO in the midst of the turmoil.”

Repaying Debt

While Henderson said Oct. 8 that GM may be ready for an initial stock offering in the second half of 2010, Whitacre said today that repaying government loans is more important than selling shares to the public.

Henderson said the same day that the company is making progress toward financial targets, including improving cash flow and reporting net profitability by 2011. GM expects to report financial results in mid-November, he said.

The other owners of GM besides the U.S. are the governments of Canada and Ontario with 11.7 percent; a United Auto Workers union trust, with 17.5 percent; and the old General Motors Corp., now called Motors Liquidation Co., with 10 percent.

To contact the reporter on this story: Jeff Green in San Antonio at jgreen16@bloomberg.net

Last Updated: November 10, 2009 16:21 EST