GM, Chrysler ask for $21.6 billion more
Straight from CNN Money: “General Motors and Chrysler LLC said Tuesday they could need an additional $21.6 billion in federal loans between them because of worsening demand for their cars and trucks.
The two firms, in documents submitted to the Treasury Department, also detailed plans to cut 50,000 jobs worldwide by the end of the year. GM said it plans to close five more plants in the next few years and confirmed it will drop some of its weaker brands.
When all is said and done,GM (GM, Fortune 500) said that by 2011 it could need a total of $30 billion, which includes the $13.4 billion in Treasury loans it has already received. In the near term, GM will most certainly need $9.1 billion in additional loans and could require another $7.5 billion in the next two years if auto sales don’t improve.
Chrysler said it now needs a total of $9 billion, up from the $4 billion Treasury loan it received in December. Chrysler said it will need that money by March 31.
GM also accelerated its job cut plans, saying that it would eliminate 47,000 jobs over the course of 2009. The company said it would cut about 20,000 jobs in the United States, or about 22% of its remaining U.S. staff.
Previously, GM called for U.S. job cuts of between 20,000 to 30,000 workers, but it had stretched out those reductions through 2012.
The company said it plans to close five additional U.S. plants by 2012 –in addition to the 12 planned closings announced in December. Executives would not identify the plants that would be closed.
“Our plan is significantly more aggressive because it has to be,” said GM Chairman Rick Wagoner.
Experts said that the request for additional dollars are not a surprise, given how bad auto sales have been since the December plea for help.”