General Motors, presenting a dire outlook for the future, said Tuesday it may need $30 billion in total government financing to weather the economic downturn and would cut 47,000 jobs worldwide and shutter five more U.S. factories in a massive restructuring plan.
The car maker is already surviving on $13.4 billion in federal loans and said in a plan submitted to the Treasury Department that it would seek an additional $16.6 billion if economic conditions worsen, but it could achieve profitability in two years and fully repay its loans by 2017.
In a news conference in Detroit, GM’s CEO Rick Wagoner called the plan “comprehensive and bold.”
Wagoner said the plan “signifies extensive efforts to meet requirements.”
President Barack Obama’s administration will review the plans from GM and Chrysler LLC but could pull the loans if they don’t approve the turnaround plans by March 31. The review could be extended into April, but if the government demands the money back it would force the companies into bankruptcy.
GM predicted it could run out of money before the March deadline and said it is seeking the additional funding under a worst-case-scenario projection, as U.S. sales have plummeted to a 26-year low and auto sales have fallen in other parts of the world.
In December, GM said it might need a total of $18 billion in government financing but only got a commitment of $13.4 billion, including $4 billion that the automaker received Tuesday.
GM wants to receive an additional $2 billion in March and $2.6 billion in April. The company has a $4.5 billion revolving line of credit that must be refinanced in 2011 but now believes that private funding won’t be available, so the automaker is asking the government to lend the money.
If market conditions deteriorate, GM says it may also need an additional $7.5 billion revolving line of credit to stay afloat, for a total potential request of $30 billion.
GM said it reviewed the potential costs of a bankruptcy filing, but said it was a poor option. If GM was forced into Chapter 11 reorganization proceedings, the company said the only credit available would be from the government, and the cost could reach as much as $100 billion.
GM’s plan details extensive cuts. The automaker would reduce its U.S. manpower from 92,000 salaried and hourly workers at the end of 2008 to 72,000 employees by the end of 2012. Worldwide, it envisions slashing 47,000 workers, including 37,000 hourly workers and 10,000 salaried employees.
In its Dec. 2 plan to the Bush administration, GM said it would cut the number of plants from 47 in 2008 to 38 by 2012. But the new approach goes further, cutting an additional five plants by 2012 to a total of 33 facilities.
GM’s brands would be reduced from eight to four — Chevrolet, Buick, Cadillac and GMC — as the automaker said in December.
The company is considering a sale of the Hummer brand and a decision could be made by the end of March. The Saturn brand could be phased out by the end of 2011. The company is also considering its options for the Pontiac and Saab brands.
GM said all of its major U.S. vehicle launches from 2009 to 2014 would be high-mileage cars and crossovers.
When asked what the company will do to combat negative consumer attitudes, Wagoner said GM will “continue to bring out really exciting products … and be creative as we can.”
Chrysler submitted an aggressive viability plan that includes an additional $5 billion in federal loans, cutting 3,000 jobs and three vehicle models.
Chrysler originally said that it would need just another $3 billion on top of the $4 billion in government loans it received in December. But it said Tuesday it will need an extra $2 billion to survive the unprecedented decline in the auto industry.
The Auburn Hills, Mich.-based automaker said it has reached fundamental agreements on concessions with unions, dealers, suppliers and lenders to achieve the concessions required by its government loan terms.
Chrysler also says it will reduce a manufacturing shift, remove 100,000 units from production capacity and cut costs by $700 million.
You can download GM’s restructuring plan here…