In response to a request from the Treasury Department, Chrysler and GM prepared scenarios for bankruptcy as part of their filings. Chrysler said a liquidation of the company would require as much as $25 billion in financing to carry out, while GM said that a Chapter 11 restructuring could cost $100 billion or more.
The new plans build upon those submitted by the automakers in early December. The government also asked GM to develop plans to reduce its $27 billion in debt by two-thirds, cut labor costs to be on par with Asian automakers and begin repaying federal loans in 2012.
To do all that, GM said it would close 14 U.S. factories by 2012 and eliminate 47,000 jobs this year, with 26,000 of them coming from the U.S. It also said it was seeking to reduce its network of dealers to 4,100 from more than 6,200 and to sell or discontinue its Saab, Hummer and Saturn brands.
If a buyer for Saab does not emerge, GM CEO Rick Wagoner said, the division "would have to file for reorganization." A final decision on Hummer, which the company has been trying to sell since June, would be reached by March 31. Saturn would continue to operate through 2011, when it would be shut down unless a buyer is found.
Ken Croft, general manager of Saturn of Cerritos, said company executives notified Saturn franchise holders of the plan Tuesday and suggested that dealers or another outside group could buy the distribution network.
"You've got a lot of people's jobs and incomes depending on what is going to happen here," Croft said.
All three automakers said Tuesday that they had reached a tentative understanding to modify their contracts with the United Auto Workers union. Because the new agreements have not been ratified, however, terms were not revealed.
Tom LaSorda, Chrysler's vice chairman, said the new terms dealt in part with reducing severance payments and changing work rules.
"The changes will help these companies face the extraordinarily difficult economic climate in which they operate," UAW President Ron Gettelfinger said.
Neither GM nor Chrysler has come to agreement with the UAW over payments due to a fund established to cover retiree healthcare benefits. GM has tried to get the union to accept equity in lieu of some cash payments.
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Investors balk
In addition, GM said it had not completed negotiations with bondholders to reduce outstanding debt. It offered few specifics about the process, which has drawn concerns from investors who balk at taking large losses on the deal. A bondholders group said late Tuesday that it would need details of the new union arrangement before negotiating.
In December, GM said it would require $12 billion in federal loans and an additional $6 billion line of credit. On Tuesday, it said that it would need as much as $30 billion altogether through 2012.
It also said that additional funds, above the amount requested, could be required in 2013 and 2014, though it expected to reach profitability by 2012 if the company's economic forecasts were accurate. GM said it also was seeking money from Canada, Germany and Sweden.
Chrysler's plans, as well as its aid request, are significantly smaller in scope than those of its bigger rival.
In December, Chrysler said it would need $7 billion to continue operations, and on Tuesday increased that total to $9 billion.
It has plans to cut production by 100,000 units and to cease production of the PT Cruiser, Dodge Durango and Chrysler Aspen models. It would cut 3,000 more jobs this year and reduce shifts at some plants.
Last month, Chrysler said it had worked out a preliminary deal with Italian automaker Fiat to share technologies and distribution infrastructure as a way to develop small automobiles without huge expenditures. In exchange, it would give Fiat a 35% stake in the company.
On Tuesday, Chrysler executives said the deal was contingent on the U.S. automaker's receiving the additional federal funding, though the company would still be solvent without it.
"We believe we are viable on our own," Nardelli said.
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ken.bensinger@latimes.com
jim.puzzanghera@latimes.com
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(BEGIN TEXT OF INFOBOX)
The strategies
Highlights of the viability plans General Motors Corp. and Chrysler submitted Tuesday to the Treasury Department:
GENERAL MOTORS
* Seeks up to $16.6 billion in loans on top of $13.4 billion already granted, for a total of $30 billion. Previously, GM said it needed only $18.4 billion.
* Plans to begin repaying loans in 2012, paying in full by 2017.
* Plans to eliminate 47,000 jobs globally this year, about 19% of its workforce, including cuts already announced.
* Plans to close five U.S. factories, bringing the total closed to 14, with 33 remaining by 2012.
* Plans to reduce vehicle models to 36 from 48 by 2012. Its plans to roll out the Chevrolet Volt electric car remain on track for 2010.
* Seeks a sale or spin-off of the Saturn division. Will wind down production of Saturn models by 2011 if no buyer emerges by March 31.
* Plans to reduce dealerships to 4,100 by 2014 from 6,246 at the end of December.
* Seeks aid from other countries, including Sweden, particularly for Saab. Says Saab might have to file for bankruptcy protection if it cannot secure separate aid.
CHRYSLER
* Seeks $5 billion in government loans on top of $4 billion already received. Previously, it said it would need just $3 billion more.
* Plans to cut three models in 2009: the Chrysler Aspen and PT Cruiser and the Dodge Durango.
* Plans to fire 3,000 employees, cut production by 100,000 cars, reduce a manufacturing shift, cut fixed costs by $700 million and sell $300 million in "non-earning assets" in 2009.
* Says it is viable as a stand-alone company but still plans to tie up with Italian automaker Fiat.
