Auto industry executives, from left, General Motors Chief Executive Officer Richard Wagoner; Chrysler Chief Executive Officer Robert Nardelli; and Ford Chief Executive Officer Alan Mulally. - File

General Motors Corp said Tuesday it needs US$12 billion in government loans to keep operating, telling Congress in a bluntly worded report that its collapse could have "severe, long-term consequences to the United States (US) economy."

Ford Motor Company, however, has signalled to Congress it might be able to go it alone.

Ford is asking Congress for a US$9 billion "stand-by line of credit" to stabilise its business, but says it doesn't expect to tap it.

Unless one of Detroit's other Big Three auto companies goes bust, Ford expects to have enough money to make it through next year without government help, it said in a plan that projected the firm will break even or turn a pretax profit in 2011.

Detroit's automakers, making a second bid for US$25 billion in funding, are presenting Congress with plans Tuesday to restructure their ailing companies and provide assurances that the funding will help them survive and thrive.

Strategy

GM, Ford and Chrysler LLC said they would refinance their companies' debt, cut executive pay, seek concessions from workers and find other ways of reviving their staggering companies.

All three companies offered separate plans for hearings that will be held Thursday and Friday.

GM said it would seek up to US$18 billion from the government: US$12 billion in loans, including US$4 billion by the end of December, and a separate US$6 billion line of credit in case market conditions worsen.

"Absent such assistance, the company will default in the near term, very likely precipitating a total collapse of the domestic industry," GM said, contending its collapse would have "a ripple effect that will have severe, long-term consequences to the US economy."

"There isn't a Plan B," said Chief Operating Officer Fritz Henderson.

"Absent support, frankly, the company just can't fund its operations."

He said GM would need US$10 billion to US$12 billion by late March.

The plans were sent to Washington on the same day that auto sales figures were released.

November US vehicle sales at General Motors fell 41 per cent, Chrysler's plunged 47 per cent, while Ford's sales dropped 31 per cent, crushing hopes that the industrywide drop in vehicle demand might be easing.

Overseas rivals

Their overseas rivals posted abysmal results Tuesday as well. Toyota's November US sales tumbled 34 per cent, and Honda's fell 32 per cent.

Like retailers of other big ticket items, automakers have taken a beating in recent months as worries about the economy and unemploy-ment have prompted consumers to slash spending.

At the same time, some people afraid that they won't qualify for credit or that it will be too costly have put purchases on hold.

On Monday, the National Bureau of Economic Research said the US entered a recession in December 2007, much earlier than most predictions.

October's seasonally adjusted annual sales rate of 10.6 million vehicles was worst in more than 25 years and far below the rate of 16 million a year earlier, according to Autodata Corp.

Many analysts had expected November sales to come in slightly better, noting that aggressive incentive spending and the plunge in gasolene prices may have put a floor under sales.

Chrysler LLC said its November sales decline included a 59 per cent decrease in demand for cars and a 42 per cent decline in truck sales.

GM in its plan to Congress said it would take significant steps by 2012 to restructure, including the reduction of 20,000 to 30,000 workers, the cutting of nine plants and the slashing of 1,750 dealer locations.

Future efforts

It would focus future efforts on four core brands - Chevrolet, GMC, Buick and Cadillac.

Henderson said the company was conducting an "expedited and strategic review" of its Saab brand and was discussing options with dealers about the future of Saturn. Pontiac would become a specialty niche brand.

The plan supports the formation of a government oversight board to ensure that taxpayers are protected and the company is restructured. GM would negotiate swapping some of its US$66 billion in debt for equity stakes, and would seek concessions from the United Auto Workers union to help it survive.

Areas under discussion include job security provisions and manpower levels.

GM chief executive Rick Wagoner will work for $1 per year and top executives will take major pay cuts. Henderson said GM would "immediately cease all corporate aircraft operations," meaning company leaders would travel by commercial aircraft.

GM said the loans could be fully repaid by 2012, but if market conditions deteriorated, the company would need more time.