Big Three Automakers Submit Plans to Congress

GM, which asked for as much as $18 billion to survive the economic downturn, said the company would not last past Jan. 1 unless it received an immediate $4 billion.

"There isn't a Plan B," GM Chief Operating Officer Fritz Henderson said, according to the Associated Press. "Absent support, frankly, the company just can't fund its operations."

Chrysler asked for an emergency $7 billion bridge loan to make it through the end of the year plus an $8.5 billion loan to help restructure its production facilities to make more fuel-efficient cars.

Ford said while it did not expect a liquidity crisis in 2009, financial collapse of Chrysler or GM would threaten its stability because of overlapping supplier and dealer networks.

All together, the three companies are requesting up to $34 billion in government loans.
Heads of the three companies, Ford CEO Alan Mulally, GM CEO Rick Wagoner and

Chrysler chief Bob Nardelli, will appear before Congress on Thursday and Friday. This

Time, they are making the trip to Washington in fuel-efficient hybrid cars instead of their controversial trips in separate private jets last month.

Ford's plan to return the company to profitability by 2011 was the first of the Big Three domestic automakers to answer Congress' call for more details on how they would spend government loans to get back on their feet. The company's plan asks for $9 billion in bridge financing to help restructure but said it may not ultimately need the help.

"We want to continue this transformation, but if the economy gets worse, and the industry gets worse, we want to be able to access the bridge loans also to keep our transformation going and be part of the economic recovery," Ford CEO Alan Mulally told Reuters.

Its plan also calls for up to a $14 billion investment in fuel efficiency improvements over the next seven years.

Mulally said if the government gave Ford a loan, he would work for $1 a year and that all management bonuses would be cancelled in 2009, as would merit increases for salaried employees in North America.

The company would also sell its five corporate planes.

Ford is also in discussion with the United Auto Workers union to reduce its cost structure and narrow the labor gap between Ford and foreign automakers.

Also in the plan is an effort to improve the fuel economy of vehicles manufactured by Ford and to launch new hybrid, plug-in hybrid and battery electric models by 2012.

Ford saw sales tumble 31 percent in November, but a sales drop is expected for the entire auto industry, which has been hurt by a struggling world economy and a tight credit market. Toyota Motor Corp, Japan's top automaker, also reported sales declines of 34 percent in November.

In order to return a pretax profit by 2011, industrywide sales would need to reach 12.5 million vehicles in 2009, 14.5 million in 2010 and 15.5 million in 2011, the Associated Press reported. The seasonally adjusted annual sales rate from October was 10.6 million vehicles.