GM Asks for $16 Billion More Government Help
Survival is the name of the game during tough economic times, and it will take GM around $16.6 Billion more government aid to make it through. Without the funding, GM may drain its cash deposits by March.
The automaker is set to cut 47000 jobs from its global employee base. Five plants in the United States are also scheduled for shutdown by 2012.
GM is also contemplating on ending the Saturn brand when units for its current models are produced by 2012.
The automaker is facing a loan and line of credit amounting to $30 billion based on a report submitted to the US Treasury Department.
GM is requesting for an additional $4.6 billion funding to complete the aid that it received last December 2008. The company also needs $4.5 billion by 2011 to pay for some revolving credit line. An additional $7.5 billion will be needed to help the company as it anticipates worsening sales.
GM executives point to the heavy deterioration of the automotive market. The first restructuring plan foresees a sale of 10.5 million units but in the new plan submitted to the federal government, GM has its downside of sales at 9.5 million units.
Somehow the restructured plan of GM Autos does not fully comply with the conditions set by the agreement with the Bush administration last December. The company firmly believes though that bankruptcy is a very risky and costly process.
President Barack Obama is set to name the car czar of the administration who will champion the move to help the automotive industry and oversee approval of the restructured plans of the car manufacturers.
