GM Gets With the Program

This time, it appears, General Motors(GM Quote) actually does get it.

"Frankly, a shortage of liquidity does focus the mind," GM President Fritz Henderson told reporters on a conference call Tuesday, as his company, along with Ford (F Quote) and Chrysler, prepared to approach Congress for the second time in two weeks to seek a bailout.

The package the automakers are seeking is now $34 billion, even though the earlier $25 billion plan failed to win support last month. GM wants $18 billion, including a $12 billion loan and a $6 billion line of credit. It says it needs the first $4 billion by the end of the month in order "to ensure minimum liquidity levels through Dec. 31."

To support its case, GM has come up with a dramatic cost-cutting plan, one that contemplates urgent negotiations with the United Auto Workers, a long-delayed pullback to just four key brands, severe curtailments in the number of dealerships and potentially a haircut for bondholders.

On the conference call, CEO Rick Wagoner acknowledged the approach of two weeks ago needed work. At the time, GM assumed the procedure would resemble the relatively undemanding route by which financial firms accessed the Troubled Asset Relief Program. "Our only precedent was the TARP initiatives," Wagoner said. "It was clear those weren't the right baselines to be looking at.

"It was unstructured what they were looking for," Wagoner continued. "This time, we got very clear direction" from House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev. "If we are looking for support, it is incumbent upon us to react."