LOS ANGELES AND WASHINGTON — General Motors Corp. and Chrysler said Tuesday that they needed nearly $22 billion more in government loans to avoid financial ruin, further darkening a day of global financial turmoil.
The struggling Detroit automakers said in business plans submitted to the Treasury Department that they needed a total of $39 billion in taxpayer-funded loans by 2012 -- and perhaps billions more in following years -- to help them survive plunging auto sales amid the global recession.
The requests now must be reviewed by the Obama administration, which faces the prospect that the auto industry could continue to seek bailout money for years to come.
The plans, aimed at showing how the automakers would remain viable with government loans, came as President Obama signed into law the $787-billion stimulus package aimed at halting the U.S. economy's downward spiral and save 3.5 million jobs.
But fresh doubts about the health of the banking industry and the ability of the stimulus to turn things around helped send markets reeling worldwide Tuesday.
The Dow Jones industrial average of blue-chip stocks fell nearly 300 points, or 3.8%, leaving it less than a point above the five-year low it set in November. In Asia, Europe and Latin America, stock indexes tumbled as much as 5% over similar concerns.
The automakers' restructuring plans, submitted after U.S. markets closed, were required under terms of the initial agreement approved by former President George W. Bush to issue $17.4 billion in loans to the automakers.
The companies said they would institute cost reductions and structural overhauls -- cutting thousands more jobs, eliminating brands and selling assets -- but they hinged their success on greater access to federal financial support.
The additional loans represent a small percentage of the remaining financial rescue fund approved last fall, said Rep. Sander M. Levin (D-Mich.), who noted that some banks also have needed more money than initially anticipated because of the worsening recession.
"They're serious and sobering," Levin said of the companies' plans. "But do we want to penalize realism? I don't think so."
A panel of top Obama economic advisors, including Treasury Secretary Timothy F. Geithner and National Economic Council Chairman Lawrence H. Summers, will start reviewing the plans this week and determine by March 31 whether they ensure long-term viability.
