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General Motors and Chrysler LLC said 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 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. "The most important issue is not what the automakers are going to do to cut costs, but rather what the government is going to do to stimulate car sales," stated Jeremy Anwyl, CEO of car sales tracker Edmunds.com. "No automaker is viable under the current market conditions, and so far the spending package appears to spread money too thin to actually make much of a difference in any one area." GM added it plans to phase out the Saturn brand by the middle of 2011 if it is unable to sell or spin-off the brand. GM is also looking to sell its Hummer and Saab brands, and will look for help from the Swedish government to support Saab until a buyer is found. Chrysler chairman Robert Nardelli said he believes additional federal help is the best course for both Chrysler and the battered U.S. economy. Nardelli added that a Chrysler bankruptcy would have a "cataclysmic" impact on the auto parts supplier industry, which would affect operations and production at all automakers. See also: GM, Chrysler call aid crucial to existence, Detroit Free Press GM, Chrysler Seeking Billions More in Aid, Fox News
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