Chrysler, GM seek up to $39 billion

Detroit —- General Motors and Chrysler said Tuesday their request for federal aid ballooned to a staggering $39 billion —- only months after receiving billions in loans —- in new plans that envision massive job losses and intense restructuring to survive a deepening recession.

General Motors Corp. presented a survival plan that calls for cutting a total of 47,000 jobs globally and closing five more U.S. factories, a move that represents the largest work force reduction announced by a U.S. company in the economic meltdown. Chrysler LLC said it will cut 3,000 more jobs and stop producing three vehicle models.

The grim reports came as the United Auto Workers union said it had reached a tentative agreement with GM, Chrysler and Ford Motor Co. on contract changes. Concessions with the union and debt-holders were a condition of the government bailout.

GM said it could need up to $30 billion from the Treasury Department, up from a previous estimate of $18 billion. That includes $13.4 billion the company has already received. The world’s largest automaker said it could run out of money by March without new funds and needs $2 billion next month and another $2.6 billion in April.

“We have a lot of work to do,” GM Chairman and Chief Executive Rick Wagoner said. “We’re still going at this with a great sense of urgency.”

GM’s request includes a credit line of $7.5 billion to be used if the downturn is more pronounced than expected. But the automaker claimed it could be profitable in two years and repay its loans by 2017.

President Barack Obama’s top spokesman told reporters aboard Air Force One on Tuesday that he wouldn’t rule out bankruptcy for the Detroit automakers. But GM Chief Operating Officer Fritz Henderson said the bankruptcy scenarios the company has looked into would cost the government more than $30 billion. The worst would cost $100 billion because GM’s revenue would severely drop, he said, citing research suggesting that sales for a bankrupt automaker would “fall off a cliff.”

Chrysler LLC requested $5 billion in new loans on top of the $4 billion it received in December. That is $2 billion more than expected.

Both requests were part of restructuring plans the two automakers owed the government in exchange for earlier loans. Treasury Secretary Timothy Geithner, who will lead an Obama administration task force reviewing the plans, said his team would meet “later this week to analyze the companies’ plans and to solicit the full range of input from across the administration.”

Dearborn, Mich.-based Ford, which borrowed billions from private sources before credit markets tightened, has said it can make it through 2009 without government help.

GM reiterated in its plan that it would reduce its North American brand lineup to four from eight —- including phasing out its long-unprofitable Saturn brand by 2011. In a letter to Saturn dealers, GM said it would be open to offers by the dealers or other investors to buy the franchise, but said they would have to arrange financing and a source of vehicles.

It would also cut 10,000 salaried and 37,000 blue-collar positions.

Wagoner said the new plan was “significantly more aggressive” than the one presented to the government on Dec. 2 because the global economy and auto sales had deteriorated swiftly.

Chrysler will eliminate the Dodge Aspen and Durango SUVs and Chrysler PT Cruiser, company President Jim Press said. Chrysler said it now projects that automakers will sell 10.1 million vehicles in the U.S. this year, the lowest level in four decades.

“We have continued to see an unprecedented decline in the automotive sector,” Chrysler Chief Executive Bob Nardelli said.

The UAW said discussions were continuing regarding the union-run trust fund that will take on retiree health care expenses starting next year. Terms of the union deal were not announced, but they were expected to eliminate the jobs bank in which laid-off workers get most of their pay.

“The changes will help these companies face the extraordinarily difficult economic climate in which they operate,” UAW President Ron Gettelfinger said in a statement.

 ELIZABETH LANDT / Staff
GM RESTRUCTURING 
GM says it will sell, drop or reposition the Pontiac, Saturn, Hummer and Saab brands as part of its restructuring. 

PONTIAC
Introduced in 1926. Filled the sporty niche in GM's lineup, providing an alternative to Chevrolet. GM says Pontiac could survive as a niche brand. 

SATURN
Introduced for the 1991 model year as GM's small-car import fighter. It could fold by 2011 unless a way is found to make it viable. 

HUMMER
Introduced in 1992 as a civilian version of the military vehicle. Marketed as the ultimate SUV, the brand could be sold or eliminated. 

SAAB
The Swedish automaker became a GM subsidiary in 2000. GM is negotiating a possible takeover by the Swedish government. 
Sources: Staff and news services