Time is up for GM, Chrysler to file restructuring plans

DETROIT -- The plans will include discussions of bankruptcy because the government said they must. The car companies insist this is not a realistic option.

When the government agreed late last year to lend GM $13.4 billion and Chrysler $4 billion to keep operating, they were told to come back now with plans showing major cost cuts and ongoing restructuring so the taxpayers' money would not be wasted on companies that would go broke.

The government Tuesday will hand over to GM the final $4 billion of that $13.4 billion commitment. Whether the automakers get any more depends on their restructuring plans, to be filed electronically Tuesday, without a formal presentation.

Both GM's and Chrysler's plans will show an "aggressive" amount of progress since the automakers were in Washington in December, says David Cole, chairman of the Center for Automotive Research.

The plans will go "beyond what you would have normally expected," says Cole, who noted that negotiations with the union and bondholders for 11th-hour sacrifices were continuing late Monday.

The government said in the December bailout deal that everybody — unions, managers, suppliers, investors, bondholders, executives — had to make major sacrifices.

The major issue for GM and the United Auto Workers is whether the union will accept GM stock in exchange for the money the automaker owes the union for a retiree health care plan the UAW agreed previously to take over.

GM's plan is likely to include more factory closings — though they may not be named — and perhaps the final word on the fate of the company's small Saturn and Hummer brands and its money-losing Saab unit.

Chrysler says it has a plan showing how it could be viable as a stand-alone company and another assuming that it partners with Italian automaker Fiat. They have a tentative deal in which the Italian car company would share its small-car technology and platforms, products Chrysler needs, in return for 35% ownership of the Detroit automaker. The two companies also could sell their products through each other's dealers.