Automakers seeking more government cash

Perino said the White House is trying to help automakers access part of the $25 billion. GM has been seeking about $5 billion from the program.

Both Barack Obama and John McCain, along with Michigan lawmakers, have urged the Bush administration to expedite the money after estimates that it could take six to 18 months to fund the loans.

While the government wrangling continues, all three U.S.-based automakers are having cash troubles, with Chrysler and GM considered by industry analysts to be in the worst shape.

GM, which is burning through more than $1 billion per month, is interested in acquiring Chrysler to access its $11 billion cash stockpile. Chrysler, however, has an unspecified amount of debt, and many of its dealers, factories, brands and models duplicate GM's and likely would be shed if GM acquires Chrysler.

GM likely wants government dollars to make the numbers work to acquire Chrysler, perhaps using some of the money to shut down redundant Chrysler operations.

Industry analysts say Chrysler is in such bad shape that it could go into bankruptcy next year if it doesn't take on a partner or isn't acquired by another automaker. GM also could reach the minimum amount of cash needed to pay its bills sometime next year, analysts have said.

David Cole, chairman of the Center for Automotive Research, said the aid would attempt to save some Chrysler jobs rather than lose all of them. Ford or Chrysler also could be in trouble if the global economic turmoil continues into next year, he said. Cole estimated that 2 million jobs, including parts suppliers and other vendors, could be lost if GM or Ford went under.

If government funding, particularly money from the fuel-efficiency loans, is released, then GM could use it for fuel efficiency projects already in the works, freeing up money for other areas, said Jack Nerad, executive market analyst for Kelley Blue Book.

"There are a lot of currently funded programs that could qualify for that money which would then free up money to do other things, keep the lights on among them," Nerad said.

The financing arms of the automakers may also be eligible for federal help under the $700 billion financial rescue package.

When Congress approved the bailout legislation, Michigan lawmakers entered language into the congressional record that made clear the bailout would apply to auto financing companies.

Gina Proia, spokeswoman for GMAC Financial Services, GM's financial arm, said the lender is still trying to figure out the process for getting part of the money, but has not yet applied for any.

GM sold 51 percent of GMAC in 2006 to Cerberus Capital Management LP, the majority owner of Chrysler, but still owns the rest.

Government funding likely will affect whether GM and Chrysler can agree on a merger. Talks continue, but a deal won't come for at least another two weeks, said a person briefed on the talks who asked not to be identified because they are private.

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