General Motors and Chrysler petitioned the federal government for additional financial aid on Tuesday, saying they needed the extra money to survive and arguing that traditional bankruptcies would cost even more than the bridge loans.
GM submitted a proposal asking for up to $16.6 billion in additional funding, on top of the $13.4 billion it has already received from the government. That includes $4.6 billion in loans it would like to receive in March and April.
GM also is requesting a $7.5 billion line of credit that could be drawn if needed, and asked to defer repayment of a $4.5 billion credit line due in 2011.
GM said it would speed up its downsizing, cutting even more drastically than it had promised in December. It said it would now close 14 factories by 2012 rather than nine and eliminate 47,000 hourly and salaried jobs globally this year, as well as speed up consolidation of its dealer network.
GM also said it would make a final decision on whether to close its Hummer truck brand by March 31 and would likely close Saturn in 2011, unless viable alternatives come up.
The Wall Street Journal reported that Saturn dealers were planning to spin off from GM into a new company that will seek to sell third-party vehicles under the Saturn brand, citing the owner of Saturn of Scottsdale, who is on the Saturn Dealer Council.
GM hopes to break even in 2011 and return to profitability in 2012. However, it sadi additional support might be needed to bolster its pension funds in 2013 and 2014.
Get all the stories you need-to-know from the most powerful name in news delivered first thing every morning to your inbox