Nov. 6 (Bloomberg) -- General Motors Corp. is focused on winning government aid to survive through 2009, not to help a merger with Chrysler LLC, as it uses cash faster than it forecast, people familiar with the plans said.

Talks on a tie-up with Cerberus Capital Management LP's Chrysler are aimed at longer-term savings and don't depend on federal funding, the people said, who asked not to be named because the discussions are private. GM plans to give an update on liquidity when it reports third-quarter results tomorrow.

GM's plea for financial help stems from the deepening slump in U.S. auto sales, which may fall next year to the lowest levels since 1991. A July 15 plan for $15 billion in asset sales and savings will no longer provide enough cash for the biggest U.S. automaker to get through the end of 2009, the people said.

Chief Executive Officer Rick Wagoner, who has been leading GM's fundraising efforts in Washington since September, was part of a meeting today with the Ford Motor Co. and Chrysler CEOs and House Speaker Nancy Pelosi. The leaders wanted to ``ensure the viability of this industry,'' Pelosi told reporters beforehand.

U.S. lawmakers have said they would seek an additional $25 billion in industrywide aid, possibly in a session that begins Nov. 17, on top of a $25 billion low-interest loan program to speed work on more fuel-efficient vehicles. President-elect Barack Obama has said helping the industry will be a priority.

Using Cash

GM probably used up about $5 billion in cash last quarter, more than the $3.6 billion in the second quarter, according to an Oct. 20 estimate by Joseph Amaturo, a Buckingham Research Group analyst in New York. He rates GM as ``underperform.''

A GM spokeswoman, Renee Rashid-Merem, said the automaker will discuss its liquidity tomorrow and had no comment on specifics.

GM has accelerated the pace of $10 billion in cost cuts under the July 15 plan, which included $1.5 billion in reduced product spending and $1.5 billion from eliminating salaried positions. Deeper reductions in the salaried payroll are planned, and GM will likely trim product-development costs further, too, the people said.

So far, GM hasn't been able to raise any new debt or sell any assets to meet the $5 billion in additional funding needs originally discussed.

At the end of the second quarter, GM reported $21 billion in cash and near cash and funds from a retiree health fund and about $5 billion in untapped lines of credit. GM drew on the $3.4 billion left in a $4.5 billion credit line in September as debt markets began to seize up.

Quarterly Loss

GM may say tomorrow its third-quarter net loss was $3.06 billion, based on the average of 4 analyst estimates compiled by Bloomberg.

``I would expect we'll see another round of cost cuts,'' said Pete Hastings, a fixed-income analyst at Morgan Keegan Inc. in Memphis, Tennessee. ``Their options are limited. There's no magic bullet here.''

Investors haven't been reassured so far. GM has tumbled 51 percent since announcing the $15 billion plan, outpacing the 21 percent slide for the Dow Jones Industrial Average. GM fell 76 cents, or 14 percent, to $4.80 at 4:15 p.m. in New York Stock Exchange composite trading.

GM's liquidity blueprint was intended to ensure that the automaker maintains a reserve of $11 billion to $14 billion needed for monthly bills.

It also was based on a forecast for industrywide U.S. sales of about 14 million units, which is where GM may fall short. Forecasters Global Insight Inc. and CSM Worldwide Inc. predict 2009 sales of about 12.5 million, the lowest since 1991.

The collapse in U.S. sales combined with a slowdown in emerging markets, which had been a source of growing revenue for GM, are overwhelming previous attempts to cut costs, the people said.

Closing Factories

Since 2004, the last time GM reported an annual profit, Wagoner has announced plans to close more than 16 North American locations and sliced more than $9 billion from operating costs. The company has cut 39,000 hourly and 7,000 salaried U.S. jobs in that period, according to regulatory filings.

GM is trying to sell its medium-duty truck business, a French factory, its Hummer brand and is also is seeking a buyer for its ACDelco parts business, which makes replacement parts such as batteries and oil filters.

The U.S. auto industry now faces an important 100-day period, GM North American President Troy Clarke told a group of auto suppliers in Detroit last night in a closed speech, a copy of which was released by the automaker.

``We certainly intend to make sure the new Obama administration understands and appreciates the immense significance of our industry and the issues facing our business,'' he said. ``And that the cost of support to the auto industry is cheap when you consider the potential ramifications and future benefits.''

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

Last Updated: November 6, 2008 18:57 EST