Dec. 11 (Bloomberg) -- General Motors Corp. has been asked for payments in advance by a small number of auto-parts suppliers after saying it would run out of money by month’s end without U.S. loans, people familiar with the matter said.

GM has rejected the requests, which so far come from a fraction of its 3,600 suppliers, said the people, who asked not to be identified because the discussions are private. GM typically pays vendors about 45 days after getting an invoice.

Demands for upfront cash add to the strain on the biggest U.S. automaker as it waits on a short-term industry rescue in Washington and the shift in power to President-elect Barack Obama and a new Congress in January. Obama favors using federal funds to remake the companies and keep them out of bankruptcy.

“Despite the current economic challenges, GM remains committed to maintaining a strong, open relationship with our suppliers,” said a spokesman, Dan Flores, who declined to give details on supplier discussions. “GM remains focused on maintaining payment terms and being a prompt payer.”

Suppliers’ payment requests to Detroit-based GM began in the last several weeks and haven’t disrupted vehicle production, one person familiar with the matter said.

The people wouldn’t say how many partsmakers had made the requests, nor would they identify the companies. No suppliers have announced that they’re requiring payment in advance. As recently as Nov. 25, GM Purchasing Vice President Bo Andersson told trade publication Automotive News that suppliers weren’t seeking payment in advance or shorter turnarounds on invoices.

Waiting on Congress

GM is seeking $10 billion in so-called bridge loans from Congress. While the U.S. House approved a $14 billion bailout measure late yesterday, Senate Republicans may derail the plan. Chrysler LLC said it needs $4 billion to survive.

GM fell 10 cents to $4.60 yesterday in New York Stock Exchange composite trading, extending this year’s slide to 82 percent. That’s the biggest decline among the 30 companies on the Dow Jones Industrial Average.

The automaker disclosed its cash drain on Nov. 7, saying it might not have enough money to finish out the year as the global credit crunch crimps access to auto loans and batters consumer confidence. GM’s sales tumbled 45 percent in October, followed by a 41 percent plunge last month.

On Dec. 2, GM said it needed $4 billion for December and another $4 billion in January to survive. Paying monthly bills at GM requires a minimum of $11 billion, and there was $16.2 billion available at the end of September, GM has said.

Reeling From Losses

GM is reeling from almost $73 billion in losses since 2004 and a 22 percent plunge in U.S. sales this year. In return for government loans, the automaker says it will accept giving warrants worth 20 percent of its loan request and appointment of a czar who would have to review and approve expenditures larger than $100 million.

Chief Executive Officer Rick Wagoner told Congress in two rounds of hearings that GM couldn’t reorganize under Chapter 11 because buyers would shun an automaker in court protection, dooming the company to liquidation.

Bankruptcy is “way down the list” after GM looked at the idea, lead director George Fisher said Dec. 3. House Speaker Nancy Pelosi of California and Senate Majority Leader Harry Reid of Nevada have said bankruptcy isn’t acceptable.

GM, Chrysler and Ford Motor Co. are paring production as sales decline, which cuts their revenue and in turn pummels suppliers. In the past two weeks, ArvinMeritor Inc. and TRW Automotive Holdings Corp. cited difficulties in predicting auto output as they withdrew profit forecasts from this year.

Partsmakers’ payrolls fell 18 percent through June to 590,000, according to the Motor & Equipment Manufacturers Association. Ford, the second-largest U.S. automaker, wants to pare its global purchasing base to about 750 companies from 1,600.

“Survivability, given an extended period of time at these, or even lower, depressed sales levels is questionable” for many suppliers, consulting firm Grant Thornton LLP wrote in a Dec. 9 report. As many as a third of North American partsmakers are at risk for bankruptcy, Grant Thornton said.

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

Last Updated: December 11, 2008 00:01 EST