Nov. 18 (Bloomberg) -- General Motors Corp., seeking low- interest federal loans to stave off financial collapse, said it will delay reimbursing U.S. dealers for sales incentives by about two weeks to preserve dwindling cash.

The move postpones payments to almost 6,500 dealers even as the largest U.S. automaker urges them to lobby Congress for the $25 billion industry bailout bill that Senate Democrats began debating yesterday. GM said it won't disclose the savings.

``It is indicative of the impact that low liquidity has on this company,'' Rebecca Lindland, an analyst with IHS Global Insight Inc. in Lexington, Massachusetts, said in an interview. ``This could really hamstring dealerships from getting more inventory, making payroll. It's a very serious action.''

Holding onto the money gave GM a third example to show lawmakers in its efforts to boost cash. The company said the 2007 labor accord has trimmed annual costs by $500 million and that Suzuki Motor Corp. would buy back GM's 3 percent stake.

GM's U.S. dealers paid about $3,409 in incentives for each car and truck in October, when the company sold 168,719 vehicles, according to research firm Autodata Corp. of Woodcliff Lake, New Jersey. At that rate, Detroit-based GM would have spent $575 million. GM doesn't announce incentive spending.

`Severe Cash Crisis'

``This action by GM is really symbolic of the severe cash crisis the company's going through right now,'' Geoff Pohanka, owner of Pohanka Automotive Group, which has five GM dealerships in Maryland and Virginia, said in an interview. ``We appreciate the cash flow ourselves and the delay is of great concern.''

GM fell 9 cents, or 2.8 percent, to $3.09 at 4:02 p.m. in New York Stock Exchange trading. The shares have tumbled 88 percent this year, the biggest decline among the 30 companies on the Dow Jones Industrial Average.

Incentive payments to dealers originally scheduled for Nov. 28 and Dec. 4 will now be made Dec. 11 and Dec. 18, said John McDonald, a GM spokesman. Dealers were notified by e-mail after GM briefed their national council on Nov. 13, McDonald said.

``We're doing this to improve liquidity,'' he said. ``This shows how important government aid is to the U.S. industry.''

GM's North American sales chief, Mark LaNeve, renewed the automaker's call for new federal loans as well as quicker access to a separate program for $25 billion in Energy Department loans to retool plants to build more fuel-efficient vehicles.

`Every Aspect'

``One of the biggest issues facing General Motors is our liquidity,'' LaNeve wrote in the e-mail to dealers. ``In this cash crunch, we have examined every aspect of our business in an effort to improve cash flow.''

GM used up $6.9 billion in cash in the third quarter, and said Nov. 7 it may not have enough to pay its monthly bills by the end of this year.

While congressional Democrats are planning to tap the $700 billion bank-rescue plan for auto-industry borrowing, Republican leaders reject that idea, saying they want to speed disbursement of the $25 billion approved earlier for Energy Department loans.

The new Democratic measure would give automakers as much as $25 billion in loans while requiring executive-pay limits and stock warrants to help taxpayers recoup the investment, according to details released by Senator Carl Levin of Michigan. The 10-year loans would carry a 5 percent interest rate for the first 5 years and 9 percent after that.

Analyst's View

It is ``critical that U.S. automakers, particularly GM, obtain some form of bridge financing to reduce working-capital risks and provide needed time to pursue a deeper restructuring,'' Itay Michaeli, a Citigroup Inc. analyst in New York, said in a note today.

``Failure to achieve this could increase liquidity risks in the very near term, possibly as soon as later this week,'' said Michaeli, who rates GM as ``sell.''

Over the weekend, GM posted a video on its Web site and on YouTube saying that congressional passage of the loan program now would avoid costs of $156 billion in lost government revenue later.

The savings estimate on annual union costs stemmed from GM's 2007 contract with the United Auto Workers. The automaker said it has been able to pare expenses by hiring out jobs such as janitors and gaining flexibility from remaining workers.

Yearly savings will rise to almost $4 billion in 2010, when a UAW-run trust fund takes over health-care obligations for union retirees, Tony Sapienza, a GM spokesman, said in an interview.

The sale of GM's Suzuki shares was completed today and raised 22.4 billion yen ($232 million), the Hamamatsu, Japan- based company said in a statement. GM had been reducing the stake since 2001, when it owned 20 percent.

Ford Motor Co. said it will sell 20 percent of Mazda Motor Corp. tomorrow, raising about $540 million. The sale will reduce Ford's stake to 13 percent. Mazda will buy back as much as 6.9 percent, with unidentified ``strategic business partners'' acquiring the rest.

To contact the reporters on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net; Jeff Green in Southfield, Michigan at jgreen16@bloomberg.net

Last Updated: November 18, 2008 16:07 EST