General Motors Corp. is lobbying the Bush administration and some members of Congress for $10-billion (U.S.) to $15-billion in aid to help keep the company going and possibly backstop a takeover of Chrysler LLC.
GM could use some of the money to shut down redundant Chrysler operations, an industry report said yesterday, and that could lead to the loss of up to 35,000 jobs nationally and up to 25,000 in Michigan.
The governors of six states - Michigan, Delaware, Kentucky, New York, Ohio and South Dakota - reminded Treasury Secretary Henry Paulson and Federal Reserve chairman Ben Bernanke that Chrysler, GM and Ford Motor Co. are "particularly challenged" in the down economy. They warned that, "as a result, the financial well-being of other major industries and millions of American citizens are at risk."
White House spokeswoman Dana Perino said the secretaries of the Treasury, Commerce and Energy departments are talking with the auto makers.
An analysis by Grant Thornton LLP predicts that a GM-Chrysler combination would likely lead to the closing of seven of Chrysler's 14 manufacturing plants, plus the loss of 12,000 factory jobs and 12,000 administrative ones, some of which have already been announced. An additional 50,000 auto supplier jobs could be lost, it added.
The head of the Canadian Auto Workers reiterated yesterday the union's opposition to a merger of GM and Chrysler, telling senior Chrysler executives that a "dark cloud" is hanging over workers of both companies.
"We still believe a merger is not in our best interests," Ken Lewenza said during a closed-door meeting with Chrysler officials, including Frank Ewasyshyn, the auto maker's executive vice-president of manufacturing.
"It's more about consolidation," Mr. Lewenza said after the meeting. "It's more about the investment community than it is about a plan for the automobile industry."
Mr. Ewasyshyn and the other Chrysler officials would not discuss the merger negotiations between GM and Chrysler's parent, Cerberus Capital Partners LP, Mr. Lewenza said.
He said he asked the Chrysler officials to take that message back to the company's chairman, Robert Nardelli.
The Grant Thornton report sees GM's acquisition of Chrysler as the least painful option, since "if one or the other company were to fail, we would face a much bigger calamity - the collapse of the North American supply base and the potential endangerment of all three Detroit auto makers and businesses that depend on them."
General Motors (GM)
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