GM plans to delay reimbursement

General Motors Corp, seeking low-interest federal loans to stave off financial collapse, said it will delay reimbursing US dealers for sales incentives by about two weeks to preserve its dwindling cash.

The move postpones payments to almost 6,500 dealers even as the largest US automaker urges them to lobby Congress for the $25 billion industry bailout bill that Senate Democrats began debating on Monday. 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.