More bad economic news

Dantheman62 · 02-18-2009, 06:22 PM

GM, Chrysler seek nearly $22 billion more U.S. loans

DETROIT (Reuters) – General Motors Corp and Chrysler LLC requested nearly $22 billion in additional U.S. government loans and said they had reached tentative deals with the United Auto Workers union to reduce labor costs.

The two automakers, which have so far received $17.4 billion in loans from the U.S. Treasury, also detailed plans to cut jobs and idle plants as part of sweeping restructuring plans submitted under the terms of their federal bailout.

GM said it was making progress on complex deals to reduce some $48 billion in debt owed to bondholders and the United Auto Workers union but had fallen short of an initial requirement to complete those agreements by Tuesday's deadline for submitting the plans to U.S. officials.

In response to signs of a prolonged slump in demand, GM said it would step up cost-cutting, eliminating 47,000 jobs this year and a total of 14 U.S. plants by 2012.

Chrysler, meanwhile, will reduce capacity by 100,000 units and cut 3,000 jobs this year.

GM said its money-losing Swedish subsidiary Saab could be forced into bankruptcy as soon as this month even as GM continues to negotiate support with the Swedish government.

GM also froze expansion plans in Thailand and said it would seek new concessions from its unions in Canada and Europe.

Earlier, Chrysler's former owner, Germany's Daimler, posted a fourth-quarter loss as it wrote down the value of a $1.5 billion loan to the automaker. Daimler previously wrote off the full value of its 19.9 percent stake in Chrysler.

Under the Chrysler restructuring plan, that $1.5 billion loan from Daimler and another $500 million loan from Cerberus would be converted into equity in a recapitalized company.

http://news.yahoo.com/s/nm/20090218/bs_nm/us_autos

02-18-2009, 06:22 PM	#1
Dantheman62 Avalon Senior Member Join Date: Sep 2008 Location: So. Cal. U.S. Posts: 4,205	Re: More bad economic news GM, Chrysler seek nearly $22 billion more U.S. loans DETROIT (Reuters) – General Motors Corp and Chrysler LLC requested nearly $22 billion in additional U.S. government loans and said they had reached tentative deals with the United Auto Workers union to reduce labor costs. The two automakers, which have so far received $17.4 billion in loans from the U.S. Treasury, also detailed plans to cut jobs and idle plants as part of sweeping restructuring plans submitted under the terms of their federal bailout. GM said it was making progress on complex deals to reduce some $48 billion in debt owed to bondholders and the United Auto Workers union but had fallen short of an initial requirement to complete those agreements by Tuesday's deadline for submitting the plans to U.S. officials. In response to signs of a prolonged slump in demand, GM said it would step up cost-cutting, eliminating 47,000 jobs this year and a total of 14 U.S. plants by 2012. Chrysler, meanwhile, will reduce capacity by 100,000 units and cut 3,000 jobs this year. GM said its money-losing Swedish subsidiary Saab could be forced into bankruptcy as soon as this month even as GM continues to negotiate support with the Swedish government. GM also froze expansion plans in Thailand and said it would seek new concessions from its unions in Canada and Europe. Earlier, Chrysler's former owner, Germany's Daimler, posted a fourth-quarter loss as it wrote down the value of a $1.5 billion loan to the automaker. Daimler previously wrote off the full value of its 19.9 percent stake in Chrysler. Under the Chrysler restructuring plan, that $1.5 billion loan from Daimler and another $500 million loan from Cerberus would be converted into equity in a recapitalized company. http://news.yahoo.com/s/nm/20090218/bs_nm/us_autos