GM Seeks Up to $16.6 Billion in New Aid, Plans 47,000 Job Cuts
Originally posted on Bloomberg
General Motors Corp. asked the U.S. for as much as $16.6 billion in new loans, more than doubling the aid to date, and said it needs some of the cash next month to survive as it sheds brands and cuts 47,000 more jobs worldwide.
Chrysler LLC, propped up like GM with federal assistance, said it’s seeking $5 billion more from the government and will shed 3,000 more positions.
The automakers met a deadline yesterday to report progress in revamping operations with $17.4 billion in loans granted so far. Now, they must show the U.S. by March 31 that they can become profitable in order to keep the money. Along with Ford Motor Co., they got a boost when the United Auto Workers said it reached tentative agreements to help trim labor expenses.
“Most of the low-hanging fruit when it comes to cost cutting is gone,” said Rebecca Lindland, an IHS Global Insight Inc. analyst in Lexington, Massachusetts. “You get to the point where you’re throwing good money after bad.”
U.S. Treasury Secretary Timothy Geithner said he will start reviewing the plans later this week when he and Lawrence Summers, director of the White House National Economic Council, convene an autos task force for President Barack Obama.
At least $9.1 billion more in loans is needed to finish restructuring, GM said, and that sum could rise to $16.6 billion should the economy worsen. Detroit-based GM has received $13.4 billion since December.