The country's largest automaker said it may need upwards of $30 billion in government aid and will cut 20,000 U.S. jobs to come back from the brink of bankruptcy.
General Motors has received $9.4 billion in federal loans since December and received another $4 billion today. But the company said it still needs as much as $16.6 billion more in financing to survive the troubled credit market.
The company also plans to cut 47,000 jobs from its global operations -- including 20,000 hourly jobs in the United States -- and to close 14 manufacturing plants by 2012. But officials stressed that slashing costs alone wouldn't be enough to return the ailing company to profitability.
In documents submitted to the government today, GM said that under "extraordinary conditions" -- including plummeting automotive sales and a weak financial market -- "GM was compelled to turn to the U.S. Government for assistance."
GM is also turning to other countries for help: at a press conference today, GM chief executive Rick Wagoner said the automaker is appealing for aid from several foreign governments, including those of Canada, Germany and Sweden.
GM said it is still working on scaling back its brands -- the company is considering selling its Hummer, Saab and Saturn brands -- while touting its commitment to fuel-efficient cars.
Treasury Secretary Tim Geithner said late today that he and a presidential task force on the auto industry would meet later this week to analyze the plans.
Earlier today, No. 3 U.S. automaker Chrysler asked for $5 billion more in U.S. government loans to help the struggling company stay afloat.
The company also said that it would cut 3,000 jobs. Since January 2007, the company as cut 32,000 positions, or 37 percent of its workforce.
Chrysler's request for additional aid comes less than two months after the company received $4 billion in loans from the federal government. In a statement, the company said an "unprecedented decline in the automotive sector" motivated the request.
"We believe the requested working capital loan is the least costly alternative and will help provide an important stimulus to the U.S. economy and deliver positive results for American taxpayers," Chrysler Chairman and CEO Robert L. Nardelli said in a statement today.
Chrysler's and GM's requests are a part of the viability plans both companies submitted to the Obama administration today.
Since December, the automakers have received billions in federal loans as they've struggled to compensate for plummeting auto sales and mounting debts.
Under terms drawn up by the Bush administration, the two car companies would have to meet specific requirements to continue receiving aid, including trimming billions in debt and changing the funding for health care for retired workers. Both conditions have proven to be serious sticking points during negotiations with bondholders -- those who hold the automakers' debts -- and the United Auto Workers, the union that represents tens of thousands of employees.
Neither company has reached a final agreement with its bondholders yet. The UAW, meanwhile, released a statement today saying that it is continuing to hold discussions on the healthcare issue with GM and Chrysler as well as with Ford, the country's no. 2 automaker, which has not requested government aid.
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.
Jobs, Jets and Stock
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.
Car Czar Out, Bloom In
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."
The task force will include some now familiar government faces -- it will be headed by Treasury Secretary Timothy Geithner and National Economic Council director Larry Summers -- as well as a less familiar one: Ron Bloom.
Bloom, a restructuring expert, has worked with both unions and Wall Street: He advises the United Steelworkers Union and, in the 1980s, served as a vice president at the investment bank Lazard Freres.
"He's been effective in dealing with both labor issues and financial issues," Cole said, "so he's the kind of person you'd like to see in the middle of this delicate discussion."
In a statement today, the USW called Bloom "the perfect negotiator."
Bloom, the union said, had restructured 50 bankrupt companies.
"Solving the problems of the domestic auto industry is a monumental challenge, but Ron has tremendous ability," said USW president Leo W. Gerard. "There's not much you haven't seen when you've restructured 50 companies in bankruptcy."