GM, Chrysler ask for $21.6 bn more, plan to cut 50,000 jobs
US auto giants General Motors and Chrysler LLC have told the government they could need an additional $21.6 billion in federal loans between them because of worsening demands for cars and trucks.business Updated: Feb 18, 2009 10:08 IST
US auto giants General Motors and Chrysler LLC have told the government they could need an additional $21.6 billion in federal loans between them because of worsening demands for cars and trucks. Presenting their updated turnaround plans by the government set Tuesday deadline, the two firms also detailed plans to cut 50,000 jobs worldwide by the end of the year.
America's largest automaker GM said it now may need as much as $30 billion by 2011, up from the $13.4 billion in federal loans it has already received. The company had originally asked for $18 billion in federal help last December.
GM said it needs $9.1 billion now and that it could need another $7 billion in the next two years if auto sales get even worse.
Its smaller rival Chrysler said it now needs $9 billion, up from the $4 billion loan from the Treasury Department in December as well as its original request for a $7 billion from Congress earlier that month. Chrysler said it will need that money by March 31.
GM also accelerated its job cut plans, saying it is looking to eliminate 47,000 jobs worldwide over the course of 2009. The company said it would cut about 20,000 jobs in the US, or about 22 percent of its remaining US staff.
Previously GM called for US job cuts of between 20,000 to 30,000 jobs, but it had stretched out those reductions through 2012.
Chrysler said it plans to cut about 3,000 jobs, or 6 percent of its workforce, and reduce capacity by another 100,000 vehicles this year as it tries to adjust to reduced demand.
It also said it has won the concessions from the United Auto Workers union and its creditors that were demanded under terms of the loan from the Treasury Department.
A newly-appointed auto panel will review both plans and determine by March 31 if GM and Chrysler can be viable in the long run. Specifically, the Treasury Department is looking for details about the progress of negotiations with creditors and the UAW.
If the panel rules either company is not viable, it could recall the outstanding loans, a move that would likely force them into bankruptcy.
The other member of Detroit's so-called Big Three, Ford Motor, which had requested a credit line of $9 billion from Congress in December, said it would not to have to tap it unless conditions in the auto market and economy deteriorated more than expected.