GM, Chrysler Could Require $21.6B More in Gov’t Loans to Survive

Can you spare another $21.6 billion?

General Motors and Chrysler collectively requested that amount in federal aid Tuesday as they filed their progress reports to Congress. Congress has provided $17.4 billion in loans to both companies since last December, along with a list of requirements to ensure that money would be well spent on rescuing the two firms. Lawmakers gave the companies until March 31 to show they can turn around their operations and make money, or else they would lose the loans.

Both companies said Tuesday that the car market isn’t getting better, and they are likely to need more loans to survive.

GM, which has received $13.4 billion in loans so far, said it could require as much as $16.6 billion more in loans by 2011, reported Bloomberg. GM is asking for at least $9.1 billion in the near future (see GM’s progress report summary).

GM said it also added another five facilities to the list of factory closures it had proposed in December, bringing the total of factories to be closed between 2008 and 2012 to 14. The company had 47 manufacturing plants back in 2008.

Chrysler, which has received $4 billion from the loan program so far, wants another $5 billion. The company plans to layoff 3,000 people by the end of this year (see Chrysler’s progress report summary).

Both companies promise to develop and sell more fuel-efficient cars, including electric vehicles, as part of their restructuring plans. GM expects to launch its Chevy Volt, a much touted plug-in hybrid electric car next year. Chrysler also outlined a launch schedule for electric cars last September.