TOM KRISHER and KEN THOMAS
February 18, 2009
Billions of dollars in government loans to prop up General Motors and Chrysler won’t be enough. The companies, which have received $17.4 billion so far, filed plans with the government more than doubling that request to a staggering total of $39 billion.
The requests, made in government-required restructuring plans filed Tuesday, were accompanied by plans for thousands more job cuts, slashing of models and brands, union concessions and the prospect of even further expense cuts.
In a dramatic acknowledgment that conditions in the U.S. auto industry have grown significantly worse in just two months, GM alone said it would cut 47,000 jobs globally by the end of the year – 19 percent of its work force. It also said it would close five more U.S. factories, although it did not identify them.
Chrysler 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. (F) 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.
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