Automakers Seek $34 Billion in Government Cash (GM, F, Chrysler)
Detroit's Big Three automakers submitted their plans and requests for cash today to Congress. Between the three, they are asking for $34 billion total in loans and credit lines.
General Motors (NYSE: GM) wants a term loan of up to $12 billion and a $6 billion line of credit; Ford (NYSE: F) wants $9 billion in bridge financing; Chrysler is requesting a $7 billion secured working capital bridge loan.
All of the automakers included plans to improve fuel economy and cut costs.
Of the three, General Motors and Chrysler are in the worst shape and Ford is the the best shape. Chrysler said it will have just $2.5 billion in cash at the end of the year, while its major expenditures for the first quarter of next year are $11.6 billion. Chrysler said without an immediate working capital bridge, its liquidity could fall below the level necessary to sustain the company through the first quarter of '09. GM said it wants an initial draw of $4 billion in December 2008 from the $12 billion loan. Ford said it may not have to access the govenment loan and expects to be break-even or profitable in 2011. Based on the dire-straights of GM and Chrysler, maybe the government should merge the two.
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