General Motors (GM) and Chrysler went cap-in-hand to the US government on Tuesday, calling for US$21.6 billion in additional US government loans to stave off bankruptcy and win extra time for restructuring.
Both companies insisted they would be able to repay the loans as they presented long-term viability plans to the US Treasury, one of the conditions of a US$17.4 billion government bailout approved in December.
“It is clear that going forward, more will be required from everyone involved — creditors, suppliers, dealers, labor and auto executives themselves — to ensure the viability of these companies going forward,” White House spokesman Robert Gibbs said in a statement.
PHOTO: AP
General Motors said it would be cutting 47,000 jobs worldwide, closing plants, killing brands, slashing production and revamping its product offerings in order to return to “sustainable profitability in 24 months.”
“These are the kind of actions we need to take to survive the current industry crisis and position GM for sustainability and success,” GM chairman and CEO Rick Wagoner said.
The largest US automaker said it could require a further US$16.6 billion in US government loans by 2011 in addition to the US$13.4 billion approved in December. Its plan also depends upon receiving US$6 billion in funding support from the governments of Canada, Germany, the UK, Sweden, and Thailand “to provide liquidity specifically for GM’s operations in these countries,” GM said.
GM warned that the cost of doing nothing would be even higher: It estimated the cost of restructuring through bankruptcy at US$100 billion and said up to 3 million US jobs could be lost if it were to fail.
Chrysler, meanwhile, called for an additional US$5 billion from the US government bailout loan program, as the industry, one of the key pillars of the US economy, reshapes in the wake of a global collapse in auto sales.
“We believe the requested working capital loan is the least-costly alternative and will help provide an important stimulus to the US economy and deliver positive results for American taxpayers,” Chrysler chairman Bob Nardelli said.
“An orderly restructuring outside of bankruptcy, together with the completion of our standalone viability plan, enhanced by a strategic alliance with Fiat, is the best option,” he said.
Chrysler said it planned to discontinue three vehicle models, cut production by 100,000 vehicles a year, eliminate 3,000 jobs and reduce fixed costs by US$700 million.
Earlier, the Detroit Three automakers, which also includes Ford, reached a “tentative” agreement with the United Auto Workers union to help reduce labor costs.
The union said the deal would allow the Detroit automakers to modify their 2007 labor contracts but did not provide any details.
“The changes will help these companies face the extraordinarily difficult economic climate in which they operate,” union president Ron Gettelfinger said in a statement.
Administration officials are expected to study the auto industry plans for several weeks before deciding a course of action.
The final plan will serve as a basis for the Treasury’s decision, due by March 31, on whether to extend the loans or call them in and comply with some requests to allow the companies to collapse.
But Chrysler’s request for additional funds could be hampered by its recently announced alliance with Italy’s Fiat, though it insists no US taxpayer funds would go to Fiat.
Ford meanwhile insists it has sufficient cash reserves to survive the downturn without federal aid, despite a US$5.9 billion loss in the fourth quarter of last year.
GET TO SAFETY: Authorities were scrambling to evacuate nearly 700 people in Hualien County to prepare for overflow from a natural dam formed by a previous typhoon Typhoon Podul yesterday intensified and accelerated as it neared Taiwan, with the impact expected to be felt overnight, the Central Weather Administration (CWA) said, while the Directorate-General of Personnel Administration announced that schools and government offices in most areas of southern and eastern Taiwan would be closed today. The affected regions are Tainan, Kaohsiung and Chiayi City, and Yunlin, Chiayi, Pingtung, Hualien and Taitung counties, as well as the outlying Penghu County. As of 10pm last night, the storm was about 370km east-southeast of Taitung County, moving west-northwest at 27kph, CWA data showed. With a radius of 120km, Podul is carrying maximum sustained
President William Lai (賴清德) yesterday criticized the nuclear energy referendum scheduled for Saturday next week, saying that holding the plebiscite before the government can conduct safety evaluations is a denial of the public’s right to make informed decisions. Lai, who is also the chairman of the Democratic Progressive Party (DPP), made the comments at the party’s Central Standing Committee meeting at its headquarters in Taipei. ‘NO’ “I will go to the ballot box on Saturday next week to cast a ‘no’ vote, as we all should do,” he said as he called on the public to reject the proposition to reactivate the decommissioned
US President Donald Trump on Friday said that Chinese President Xi Jinping (習近平) told him China would not invade Taiwan while Trump is in office. Trump made the remarks in an interview with Fox News, ahead of talks with Russian President Vladimir Putin over Moscow’s invasion of Ukraine. “I will tell you, you know, you have a very similar thing with President Xi of China and Taiwan, but I don’t believe there’s any way it’s going to happen as long as I’m here. We’ll see,” Trump said during an interview on Fox News’ Special Report. “He told me: ‘I will never do
EXCEPTIONS: Some people could be allowed to reclaim citizenship for humanitarian reasons or because of their contributions to the nation, the interior ministry said Taiwan would soon unveil new rules banning Taiwanese residents of China from reclaiming their citizenship if they participated in Beijing’s propaganda activities, the Ministry of the Interior said on Monday. The measures were drafted following President William Lai’s (賴清德) March 13 directive that the government counter China’s espionage and influence campaigns aimed at undermining Taiwan’s sovereignty, the ministry said in a preview of the rules. The changes would affect Taiwanese who lost their citizenship after becoming permanent residents of China or obtaining passports issued by China, it said. Under the measures, former Taiwanese nationals living in China who had made statements denying the
RSS