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Chrysler asks govt for $5 billion more in loans
By TOM KRISHER and KEN THOMAS
Associated Press Writers
DETROIT -- Chrysler LLC on Tuesday told the U.S. government it needs even more taxpayer money to survive than originally thought. General Motors Corp. is expected to do the same. Meanwhile, the United Auto Workers union said it has reached a tentative agreement with Chrysler, GM and Ford Motor Co. on modifications to existing labor contracts. The agreement was announced by UAW President Ron Gettelfinger as Chrysler unveiled new job cuts as part of its restructuring.
Acknowledging that industry conditions are worse than expected when it made the case in December for a government bailout, Chrysler requested an additional $5 billion in government loans. It originally said it would need $3 billion more. The company had previously received $4 billion from the Treasury Department.
General Motors Corp. is expected shortly to release the details of its own restructuring plan. GM has received $13.4 billion in government loans - $4 billion of that on Tuesday.
The UAW said discussions are continuing regarding the union-run trust fund that will take on retiree health care expenses starting next year. Under terms of the government loans, both Chrysler and GM are required to reach concessions with the UAW and debt holders.
To prove they can survive as viable companies, both Chrysler and GM need to sharply reduce costs. To that end, Chrysler said it will cut 3,000 more jobs and stop producing three vehicle models.
Chrysler said it now projects that automakers will sell 10.1 million vehicles in the U.S. this year, the lowest level in four decades.
Chrysler Vice Chairman and President Jim Press said in a conference call with reporters that the company will eliminate the Dodge Aspen, Durango and Chrysler PT Cruiser.
GM has previously outlined reductions to both its hourly and salaried work force and has said it plans to cut back to four vehicle brands from eight.
The plans still have to be vetted by Treasury and the new autos task force announced by the Obama administration Sunday night.
The news came on a day when President Barack Obama signed into law a massive economic recovery plan. Signs that the recession is deepening were more immediate for investors, however, and they dumped stocks and pushed oil prices sharply lower.
GM is likely to seek more money, at least up to the $18 billion that it requested from Congress in December under its worst-case scenario projections. That scenario has arrived with U.S. sales at a 26-year low and auto sales dropping in other parts of the world, a person briefed on GM's plan said.
The plan will stick with GM's public strategy of trying to remain viable and avoiding Chapter 11 bankruptcy protection, said the person, who spoke on condition of anonymity because the plan has not been finalized.
Associated Press Auto Writer Dan Strumpf in New York contributed to this story. Associated Press Writer Ken Thomas reported from Washington.
By TOM KRISHER and KEN THOMAS
Associated Press Writers
DETROIT -- Chrysler LLC on Tuesday told the U.S. government it needs even more taxpayer money to survive than originally thought. General Motors Corp. is expected to do the same. Meanwhile, the United Auto Workers union said it has reached a tentative agreement with Chrysler, GM and Ford Motor Co. on modifications to existing labor contracts. The agreement was announced by UAW President Ron Gettelfinger as Chrysler unveiled new job cuts as part of its restructuring.
Acknowledging that industry conditions are worse than expected when it made the case in December for a government bailout, Chrysler requested an additional $5 billion in government loans. It originally said it would need $3 billion more. The company had previously received $4 billion from the Treasury Department.
General Motors Corp. is expected shortly to release the details of its own restructuring plan. GM has received $13.4 billion in government loans - $4 billion of that on Tuesday.
The UAW said discussions are continuing regarding the union-run trust fund that will take on retiree health care expenses starting next year. Under terms of the government loans, both Chrysler and GM are required to reach concessions with the UAW and debt holders.
To prove they can survive as viable companies, both Chrysler and GM need to sharply reduce costs. To that end, Chrysler said it will cut 3,000 more jobs and stop producing three vehicle models.
Chrysler said it now projects that automakers will sell 10.1 million vehicles in the U.S. this year, the lowest level in four decades.
Chrysler Vice Chairman and President Jim Press said in a conference call with reporters that the company will eliminate the Dodge Aspen, Durango and Chrysler PT Cruiser.
GM has previously outlined reductions to both its hourly and salaried work force and has said it plans to cut back to four vehicle brands from eight.
The plans still have to be vetted by Treasury and the new autos task force announced by the Obama administration Sunday night.
The news came on a day when President Barack Obama signed into law a massive economic recovery plan. Signs that the recession is deepening were more immediate for investors, however, and they dumped stocks and pushed oil prices sharply lower.
GM is likely to seek more money, at least up to the $18 billion that it requested from Congress in December under its worst-case scenario projections. That scenario has arrived with U.S. sales at a 26-year low and auto sales dropping in other parts of the world, a person briefed on GM's plan said.
The plan will stick with GM's public strategy of trying to remain viable and avoiding Chapter 11 bankruptcy protection, said the person, who spoke on condition of anonymity because the plan has not been finalized.
Associated Press Auto Writer Dan Strumpf in New York contributed to this story. Associated Press Writer Ken Thomas reported from Washington.
