WASHINGTON -- Six governors, including Michigan Gov. Jennifer Granholm, asked the U.S. Treasury on Thursday to speed aid to the auto industry, saying it faced "unimaginable challenges."
The letter from Granholm and the governors of Delaware, Kentucky, New York, Ohio and South Dakota warned Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernanke that the credit crisis had made auto loans harder to come by, curbing the market for new cars and trucks.
"As governors, we appreciate your recent efforts to provide liquidity to the credit and financial markets, and urge that you use your broad regulatory authority to ensure that your continued actions help promote liquidity within the U.S. auto industry," the governors wrote.
The letter does not mention the proposed merger between General Motors and Chrysler, which could save GM from its own cash crunch while sparking up to 40,000 job cuts, most of which would come from Michigan.
GM has been seeking up to $10 billion in aid from federal officials, and the Bush administration has been speeding efforts to launch a $25 billion loan program for the industry.
Under the $700 billion bailout plan passed earlier this month, the Treasury has the power to buy loans from auto finance companies such as GMAC and Ford Credit.
Separately, GMAC Financial Services confirmed Thursday that it is talking with federal regulators about becoming a bank holding company, a move that could help it access government funding and be part of a potential acquisition of Chrysler by GM.
GMAC said it plans to refinance its debt and is in discussions with the Treasury Department, the Federal Deposit Insurance Corp. and other federal regulators about changing its status.
Under the designation, "GMAC would obtain increased flexibility and stability to fulfill its core mission of providing automotive and mortgage financing to consumers and businesses," the company said in a statement. "GMAC also expects to have expanded opportunities for funding and for access to capital as a bank holding company."
Cerberus Capital Management owns 51% of GMAC, and General Motors owns the rest. Cerberus also is the majority owner of Chrysler, which has been in talks with GM about a possible merger aimed at helping the automakers survive the downturn in the auto industry.