In the days before the viability plan deadlines, both GM and Chrysler said they had already taken steps to meet some of the government's loan requirements.
Chrysler slashed 4,300 salaried positions in December through retirements and buyouts while GM is cutting 10,000 salaried jobs, including 3,400 in the United States. GM is also offering buyouts for 22,000 hourly workers. Some of GM's buyout packages include $25,000 for new GM cars.
GM spokesman Tom Wilkinson said that, in accordance with an agreement the automakers reached with the UAW in 2007, the workers replacing those who take the buyouts will be lower paid. That, he said, will bring down the company's average labor costs and help it comply with one of the government's loan terms -- that GM and Chrysler reduce workers' average pay so that it's competitive with U.S. wages for Toyota, Nissan and Honda employees.
GM and Chrysler have also ended their so-called job banks, which allowed laid-off workers to retain most of their salaries until they were offered new auto jobs.
Wilkinson said that GM also immediately complied with the government requirement that the company limit executive pay by slashing the salary of its CEO, Rick Wagoner, to $1. (Chrysler CEO Nardelli has been receiving a $1 salary since joining the company in 2007.)
Wilkinson conceded that GM was less successful in fulfilling another government loan requirement -- that it sell its fleet of seven private jets. The jets are up for sale, he said, but no one's buying.
"The market for used aircraft is not so hot right now," he said.
Analysts say the hardest loan requirements for the automakers to meet stipulate that the companies reduce their unsecured debt, borrowings not backed by collateral, by two-thirds and that they change the way they contribute to the UAW's retiree health care fund.
To meet the debt condition, the auto companies must negotiate with bondholders. To meet the health care condition, they need the approval of the UAW. Analysts say that both issues are likely major sticking points in the companies' negotiations and both auto companies told ABC News that, as of yesterday afternoon, they were still in talks with their stakeholders.
"It's a drama that is almost inevitable," said David Cole, the chairman for the Center of Automotive Research in Ann Arbor, Mich.
Both conditions, Cole explained, involve stock. In the case of the automakers' debts, bondholders would have to agree to accept company stock in place of debt payments. In case of the UAW retiree health care program, the union would have to agree to accept half-stock, half-cash payments instead of all-cash payments to fund the program.
Concern about the depreciation of auto stock is weighing heavily, analysts said.
"If the value of the assets are going down more then planned, all of a sudden they can't pay hospital bills for retirees," said Craig Fitzgerald, an auto analyst at Plante & Moran PLLC in Southfield, Mich.
Earlier this week, the Obama administration announced changes to the government's plans to track and guide the auto industry's recovery efforts. While the Bush administration had envisioned a single "car czar" to oversee the restructuring of the auto industry, Obama will instead establisha "Presidential Task Force on Autos."