Jan. 11 (Bloomberg) -- General Motors Corp., buoyed by $4 billion in emergency loans, is “whacking” at its cost structure to withstand reduced demand and conserve cash, Chief Executive Officer Rick Wagoner said.

U.S. industrywide sales may run in the range of 10 million vehicles all year, Wagoner told reporters at the Detroit auto show today. Purchases plummeted to 13.2 million in 2008 after averaging about 16 million annually during the past decade.

Plans for the sale of the Saab unit are “moving along,” and GM has found interested parties, Wagoner said, without identifying prospective buyers. GM said Dec. 2 it is considering options for Saab and Saturn and will shrink offerings for Pontiac, expanding an earlier plan to sell Hummer.

Eliminating brands and dealers is part of GM’s plan to restructure its business in exchange for $13.4 billion in U.S. aid. The automaker is seeking concessions from its biggest union and is chopping debt in half because the government can call the loans should GM fail to show progress by March 31.

It’s premature to discuss how the biggest U.S. automaker might work with bondholders to win their assent in reducing debt, Wagoner said. Government loan conditions require Detroit- based GM to cut its unsecured public debt by at least two thirds in an exchange with bondholders for equity or other methods.

Focus on Cars, Trucks

Wagoner, 55, sought to shift GM’s message back to its products and away from its survival plan by parading 17 current and future cars and trucks through an invited crowd of about 600 employees, retirees and dealers at the North American International Auto Show.

Members of the throng chanted “here to stay” and carried signs emphasizing fuel efficiency and new technology.

GM said it will bring a minicar called the Chevrolet Spark to the U.S. market by 2011. It also showed a prototype Cadillac electric car using the next generation of technology from the Volt plug-in auto, which is due to debut in late 2010, along with a new Buick sedan and Cadillac sport-utility vehicle.

After saying it would run short of operating cash by the end of 2008 without an infusion of financial aid, GM received the first $4 billion in emergency loans on Dec. 31 from the Troubled Asset Relief Program. The money is being used to pay bills, mostly to the automaker’s 3,000 suppliers.

An additional $5.4 billion is due this month. Should Congress agree to release a second $350 billion in TARP funds, GM will get $4 billion more in February. A progress report must be presented to the Treasury Department by Feb. 17.

Trimming Cash Use

The automaker has already completed actions necessary to pare its cash use by $15 billion through this year, North American President Troy Clarke told reporters today. GM outlined $5 billion in additional trims Nov. 7, after saying in July it was seeking $10 billion in cuts to meet cash needs.

Talks on the future of the Saturn brand are still at an early stage, Clarke said, adding that asset sales may be delayed until GM’s long-term outlook is more secure. GM is also seeking a buyer for a French factory and its AC Delco aftermarket parts unit.

GM is in preliminary discussions with the United Auto Workers about how to reduce labor costs and cash payments into a union retiree health-care fund. He said the union and automaker haven’t discussed the effect of a provision that would put the federal borrowing in default in the event of a strike.

The federal loans are sufficient for GM’s current viability plan, and the automaker will reassess its needs at the end of this quarter, Wagoner said. He said he is still confident GM will be able to pay the loans back in three years. GM has posted about $73 billion in losses since the end of 2004, the last time it earned an annual profit.

GM’s U.S. sales fell 23 percent last year, outpacing the 18 percent industrywide decline.

The U.S. recession also is straining parts suppliers’ balance sheets, and GM is working with vendors as sales worsen, Clarke said. He wouldn’t comment on the extent of suppliers facing possible insolvency.

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

Last Updated: January 11, 2009 14:48 EST