GM, Chrysler in line for more federal aid from The Auto Task Force

Chrysler in line for $500M more; GM weighs fate of Pontiac, GMC

Robert Snell and David Shepardson / The Detroit News
Washington -- The Obama auto task force is preparing to loan General Motors Corp. about $5 billion in additional federal short-term aid, and Chrysler LLC $500 million, an Obama administration official familiar with the matter said Thursday.

The disclosure assigns a dollar amount to the pledge of continued short-term support issued late last month by the administration, after it rejected GM's and Chrysler's restructuring plans and requests for up to $21.6 billion in additional assistance. The official said the decision was expected to be announced next week -- though the precise amounts were still the subject of talks between the government and the automakers.

The White House said Thursday night no decision had been made about how much either automaker will receive. "No decisions have been made on how much working capital GM and Chrysler will be getting," said spokeswoman Amy Brundage...More

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Chrysler plan seeks $2 billion more in federal aid, will cut 3,000 more jobs

Alisa Priddle / The Detroit News
Chrysler LLC wants an additional $2 billion in federal aid on top of the $4 billion received to date and the $3 billion it has requested but has not been granted.

In addition, the struggling Auburn Hills automaker also plans to cut its fixed costs by $700 million and eliminate another 3,000 jobs this year. The plan also would:

• Reduce one shift of manufacturing

Discontinue three vehicle models

• Take out 100,000 units of capacity

• Sell $300 million of additional non-earning assets

Chrysler said it also has suspended the 401(k) retirement plan match, as well as incentive bonuses, merit increases, and has retiree life-insurance benefits.

These are among the first details of the restructuring plan submitted to the government this evening in a document designed to show the automaker can become a sustainable, standalone company if it receives a total of $9 billion in bridge loans from the government.

And it can be even more profitable with a partnership with Fiat SpA, Chrysler said.

"We believe that Chrysler LLC will be viable based on the updated assumptions contained in this submission, and that an orderly restructuring outside of bankruptcy, together with the completion of our standalone viability plan, enhanced by a strategic alliance with Fiat, is the best option," said Chrysler chairman Robert Nardelli.

But deteriorating market conditions and lack of credit, resulting in Chrysler sales falling 30 percent in 2008 and 55 percent in January, has forced Chrysler to revise its U.S. annual sales forecast to 10.1 million units for this year and 10.8 million units for 2009-2012.

For Chrysler it represents a sales decline of approximately 720,000 units, (or an average 180,000 units per year) assuming a 10 percent market share. That translates to about $18 billion in lost revenue and a $3.6 billion decline in cash inflows during the four years.

Hence, the request for an additional $2 billion.

The plan promises 24 vehicle launches in 48 months and pursuit of electric technology to develop fuel-efficient, low-emission vehicles, including an electric-drive vehicle in 2010. New products include new versions of the Jeep Grand Cherokee, Dodge Charger, Dodge Durango and Chrysler 300 next year.

The Dodge Durango and Chrysler Aspen will not resume production and Chrysler PT Cruiser will be discontinued this summer. Those three nameplates join the already announced eliminations of the PT Cruiser convertible, Dodge Magnum, Chrysler Crossfire and Chrysler Pacifica. ...More

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