Tuesday, December 2, 2008

Detroit 3 seek bigger aid package

The Detroit 3 automakers increased their request for federal assistance Tuesday to $34 billion, with General Motors and Chrysler saying they could buckle by year's end because of the increasing pressure on their business.
Lawmakers in Washington will hold hearings Thursday and Friday to consider the requests, with the top executives of the companies arriving in Washington in hybrid vehicles rather than the corporate jets that generated such a firestorm last time.
The beleaguered industry is facing sales declines, which continued in November, and is cutting production next year.
Chrysler says it needs $7 billion by the end of the year and GM says it needs $4 billion.
“Absent such assistance, the company will default in the near term,” GM told lawmakers, “very likely precipitating a total collapse of the domestic industry and its extensive supply chain, with a ripple effect that will have severe, long-term consequences to the U.S. economy.”
GM is seeking a total of $18 billion, with $12 billion in loans and $6 billion as an emergency line of credit.
The company has said it would cut four of its U.S. brands, nine factories, up to 30,000 workers and billions of dollars in costs, in order to reach profitability by 2011.
Ford asked for a $9 billion government credit line.

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