UPDATE 2-GM to speed car launches, target market share gain

* GM to free cash to accelerate vehicle launches-chairman

* Chairman Whitacre says automaker aiming for higher share

* Whitacre says board unanimously backs CEO Henderson

By Kevin Krolicki

DETROIT, Aug 5 (Reuters) - General Motors Co [GM.UL] will use some of the funding left from its bankruptcy reorganization to accelerate key vehicle launches as it focuses on recapturing lost market share, the automaker's chairman said on Wednesday.

Ed Whitacre, the former chief executive of AT&T Inc (T.N), was speaking a day after concluding his first meeting presiding as chairman of GM's reorganized board.

At the two-day board meeting, directors asked the automaker, now majority owned by the U.S. government, to move up the start of production of some planned models, addressing a weakness for the reorganized company.

"It's important to us that we improve our market share. That translates to the top line, and that is important to this company," Whitacre told a small group of reporters on a conference call organized by GM. "We need to improve the number of vehicles sold."

Whitacre was one of 10 appointees to the reorganized board supported by the U.S. Treasury, which now owns a nearly 61 percent stake in GM.

The 13-member board gave its unanimous endorsement to GM Chief Executive Fritz Henderson at the initial meeting of directors, Whitacre said.

Henderson took his job in March when the Obama administration asked his predecessor, Rick Wagoner, to step down. From the start, Henderson has faced questions about whether he would be an interim choice to run the automaker.

A veteran GM executive, Henderson has streamlined the senior management ranks and promised faster decision-making and less bureaucracy at the 100-year-old company.

"Fritz and I talk almost every day. The board unanimously supports him," Whitacre said. "He certainly has our blessing and encouragement. He knows what the board expects from him. He's enthusiastic. He's a smart guy, and we think he can get the job done. He's going to run GM."

Over the past four years, GM has lost $82 billion and it has not announced a timetable for returning to profit.

"We have a profitability plan and I think we'll surprise some people with how quickly we get there," Whitacre said.

SPENDING MORE ON CARS

Ron Bloom, who heads the Obama administration's autos task force, met over the weekend with GM directors in Detroit before the first board meeting, Whitacre said.

Bloom, who has pledged that the government will be a hands-off investor in GM, said Whitacre was right to send a message that the automaker needs to target growth now.

"I think the imperative to grow is a very important imperative. It brings a lot of positive changes," Bloom told reporters on the sidelines of an industry event in Traverse City, Michigan. "We are hopeful the company can grow."

Whitacre declined to say which models GM is now targeting for faster production. The automaker typically has not disclosed that kind of detailed product-related information in the past because of the competitive stakes.

But the move by GM's board to spend more now on vehicle launches marks a reversal from its stance since late last year, when it began delaying projects in order to shore up cash.

Whitacre said directors share the view that the economy is improving and spent a significant part of the meeting discussing how GM can take advantage of improving sales.

GM had a 19.5 percent share of the U.S. market in the first seven months of this year -- including the Saab, Hummer and Saturn brands it plans to drop -- after losing market share for years to import brands led by Toyota Motor Corp (7203.T). Toyota is No. 2 in the U.S. market with a 17-percent share.

"We're not going to draw a line in the sand and try to fight it out there. We're going to try to improve (market share)," Whitacre said.

The move by GM to invest more on vehicles marks the first decision by the automaker on how to use government financing remaining in an escrow account earmarked for its turnaround.

That account contained about $20 billion at the time GM exited bankruptcy in July. GM executives have said another potential use for the funds would be to make a payment this year against its projected pension shortfall.

GM estimated earlier this year that it would need to contribute over $18 billion to its pension funds in the two-year span of 2013 and 2014.

Bloom said the Treasury would remain involved in monitoring GM's use of its remaining funding. He declined to say how much money remained. "We're not releasing that exact data at this time," he said. (Editing by Lisa Von Ahn, editing by Gerald E. McCormick)