GM May Need Up to $30 Billion in Gov't Aid

Chrysler has also asked for billions more in government help.

ByABC News
February 16, 2009, 7:45 PM

Feb. 17, 2009 — -- 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.

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"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.