GM investors say $9.4-b lifeline won’t be enough

NEW YORK: General Motors CEO Rick Wagoner said the biggest US automaker got ���what we asked for��� with $9.4 billion in US loans over the next 24 days. Investors bet that it���s not enough. GM slid 6.8% on Tuesday in early New York trading to extend Monday���s 22% plunge. Credit-default swaps on the company���s bonds jumped 2 percentage points in a sign of increasing concern that the Bush administration���s bailout may end in a default.

The stock-price slide erased the 23% gain on December 19, when Detroit-based GM received a federal aid package to help the automaker stay in business until March 31 while it crafts a plan to shut plants, shed brands and reduce debt.

���It���s almost impossible for a management that invested in the assets, that hired the people, that put forth the strategy, to change so dramatically in such a short period of time,��� Edward Altman, a New York University finance professor who created the Z-score formula to measure bankruptcy risk, said.

There is a ���high��� likelihood of a GM bankruptcy, Standard & Poor���s said on Monday in reducing the rating on the company���s unsecured debt to C, or 11 grades below investment quality. Robert Schulz, an S&P analyst in New York, said creditors can expect ���negligible recovery��� should the automaker default. GM has slashed output and won union concessions since saying November 7 it may run out of operating cash by year���s end. The automaker said it would need as much as $18 billion in aid or face a possible bankruptcy.