DETROIT -- General Motors Corp. will need as much as $16.6 billion in additional federal aid if market conditions worsen but could run out of money next month.
GM needs $2 billion more in aid in March and $2.6 billion in April to stay afloat.
The need is outlined in a restructuring plan submitted today to the U.S. Treasury Department that illustrates how GM will repay $13.4 billion in aid that has kept the automaker operating since it nearly ran out of cash in December. GM plans to begin repaying its loans in 2012.
The plan, which will shrink and transform an iconic American company, built upon a Dec. 2 submission to Congress that provided a restructuring framework. There were new details included in the plan, which prescribes global cuts that hit workers, dealers, bondholders and facilities. The entire plan is designed to have GM become sustainable profitable within 24 months.
Those new details include:
-- Eliminating 47,000 workers -- 37,000 hourly workers and 10,000 salaried workers -- around the world this year, including 20,000 workers in the U.S.
In the Dec. 2 submission to Congress, the automaker said it would cut up to 31,000 jobs.
-- Shuttering five more plants in North America, bringing the total to 14 plant closures within the next three years.
-- GM continues to talk to dealers about the future of the Saturn brand, which could be eliminated in 2011 unless dealers come up with an alternative.
-- GM has several parties interested in buying the Hummer brand, but the brand could be eliminated by the end of March if a deal is not reached.
-- GM is negotiating a deal for Saab with the Swedish government, but if none is reached, the subsidiary could file for reorganization this month or next. That would leave GM with four core brands: Chevrolet, Cadillac, GMC and Buick.
The Detroit automaker's cash needs have grown as the industrywide sales market has tanked in recent months.
GM originally sought $18 billion before President Bush approved the $17.4 billion package late last year.
The automaker told Congress in December that it could need $15 billion by March 31 if the U.S. sales rate fell to 9.9 million vehicles a month on an annualized basis in the first quarter. The rate fell to 9.6 million in January.
GM also has lowered its break-even point in the North American market to a sales rate of 11.5 million to 12 million vehicles from a range of 12.5 million to 13 million.
In its original $18 billion request, GM assumed it would be able to refinance a $4.5 billion revolving credit line that is due in 2011. GM no longer believes it can refinance the $4.5 billion because credit markets have dried up.
So, GM is asking for $4.5 billion in additional loans, plus a $7.5 billion revolving line of credit if the market continues to deteriorate.
That would bring the total requested federal aid to $30 billion.
In the plan, GM analyzed the possibility of filing bankruptcy but concluded the amount of financing needed would dwarf the $30 billion in aid the automaker has requested and the process would take too long.
GM also concluded Debtor in Possession financing would only be available from the government or internationallyChief Financial Officer Ray Young will visit Capitol Hill to brief lawmakers Wednesday.
GM now has until March 31 to make progress on the plan, particularly in extracting concessions from the United Auto Workers and bondholders. If GM fails to show sufficient progress, the U.S. Treasury Department could recall the loans and essentially force the automaker into bankruptcy.
Two of the biggest and thorniest issues for GM have been restructuring payments into the UAW health care trust and convincing bondholders to agree to a complicated debt exchange, which would cut the automaker's unsecured debt by two-thirds to $9.2 billion. Sources have told The Detroit News that bondholders want more money in exchange for forgiving billions in debt.
A loan target requires the union to accept half of the funding for the health care trust in cash and the other half in company stock. The proposal called for a smaller cash portion.
"The UAW has reached tentative understandings with Chrysler, Ford and General Motors on modifications to the 2007 national agreements. The changes will help these companies face the extraordinarily difficult economic climate in which they operate," UAW President Ron Gettelfinger said in a statement this afternoon. "Discussions are continuing regarding the Voluntary Employee Beneficiary Associations (VEBAs) at all three companies.
"The UAW is withholding the terms of the tentative understanding pending completion of the VEBA discussions and ratification of the agreements."
Restructuring targets set by the Bush administration as part of up to $17.4 billion in loans to GM and Chrysler include requiring the UAW to accept half of the health care trust fund payments due to the union from the automakers in 2010 in the form of stock rather than cash and work rules and wages that are competitive with foreign automakers by the end of 2009.
