Carmakers seek more aid

DETROIT --- The U.S. auto industry needs even more help from the government to survive than originally thought.


General Motors on Tuesday said it could need up to $30 billion from the Treasury Department to keep operating. Included in that amount is $13.4 billion the company has already received. Previously, GM had said it could need as much as $18 billion.

General Motors Corp. and Chrysler LLC said Tuesday they'll need billions more in government loans than they predicted just two months ago. The two automakers also plan further job cuts and additional curtailment of auto production.

Both companies plan to reduce the number of models they offer to car buyers over the next few years.

Acknowledging that industry conditions are worse than expected when it made the case in December for a government bailout, GM said it could run out of money by March without new funds from the government. The latest request includes $9.1 billion in new loans and a $7.5 billion credit line.

Chrysler requested an additional $5 billion from Treasury. It originally said it would need $3 billion more. The company had already received $4 billion.

GM's survival plan also calls for the cutting of 47,000 jobs and the closing of five more U.S. factories. Chrysler said it will cut 3,000 more jobs and stop producing three vehicle models.

Auburn Hills, Mich.-based Chrysler said the economy and the market for new cars has deteriorated significantly since its initial request. 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.

Chrysler Vice Chairman and President Jim Press said in a conference call with reporters that the company will eliminate the Dodge Aspen, Durango and Chrysler PT Cruiser.

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

The plans still have to be vetted by Treasury and the new autos task force announced by the Obama administration Sunday night. Details were unveiled on a day when President Barack Obama signed into law a massive economic recovery plan. Signs that the recession is deepening were more immediate for investors, however, and they dumped stocks and pushed oil prices sharply lower.

The UAW said discussions are continuing regarding the union-run trust fund that will take on retiree health care expenses starting next year. Under terms of the government loans, both Chrysler and GM are required to reach concessions with the UAW and debt holders.

GM has previously outlined reductions to both its hourly and salaried work force and plans to cut back to four vehicle brands from eight.


DETROIT --- The United Auto Workers union and Detroit's three automakers reached a tentative agreement on contract concessions Tuesday, about the same time General Motors Corp. and Chrysler LLC filed restructuring plans to justify government loans.

But the union was unable to make a deal with GM, Chrysler and Ford Motor Co. on funding for a trust fund that will take over retiree health care costs starting next year.

Terms of the deal were not announced, but they were expected to eliminate the jobs bank in which laid-off workers get most of their pay, in addition to other changes that the government loan terms set out so the companies' labor costs are competitive with their Japanese counterparts that have U.S. factories.

Union President Ron Gettelfinger said in a statement that discussions are continuing with all three companies about billions in cash payments into the trust funds, called voluntary employees beneficiary associations.


Mon, 08/21/2017 - 20:30

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