GM, Chrysler request $39B in aid

In this Sept. 12, 2008, file photo, assembly line workers join the cab to the chassis of a Chrysler’s 2009 Dodge Ram pickup being assembled at the Warren Truck Plant in Warren, Mich. General Motors Corp. and Chrysler LLC on Tuesday asked the government for an additional 9 billion in aid and presented proposals that would cut thousands of jobs.

? 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.

The requests pale in comparison to what it might cost taxpayers if GM or Chrysler go bankrupt, said Aaron Bragman, auto industry analyst for the consulting firm IHS Global Insight in Troy, Mich.

“These are not small, insignificant organizations,” he said. “These are the lifeblood of American manufacturing.”

The company looked into three bankruptcy scenarios, all of which would cost the government more than $30 billion, GM Chief Operating Officer Fritz Henderson said. The worst scenario would cost $100 billion because GM’s revenue would severely drop, he said.