Automakers ready more detailed loan request

Sen. Debbie Stabenow, D-Mich., said the companies need to talk about advanced vehicles under development and give a specific accounting of how much in loans they need and why.

“The image that they project is very important. It’s important that they show at every level they understand how serious this is and that they’re willing to make sacrifices as well,” Stabenow said.

Automakers need to “rhetorically indicate the willingness to take whatever additional steps are necessary to protect their companies,” said Sen. Carl Levin, D-Mich. “These are good people who are running these companies. They have a sense of fiduciary duty.”

The person with knowledge of Chrysler’s plans said the automaker will present a detailed outline of its restructuring efforts as well as plans for long-term viability, and all stakeholders, including the UAW, parts suppliers, creditors and upper management, are discussing what sacrifices need to be made.

Debt may be refinanced, said the person, who didn’t want to be identified because the plans have not been delivered to Congress. The automakers also must work out terms with lenders so the government can move into the senior creditor position, something that Pelosi and Reid have said is a requirement to get government loans.

All three automakers are strapped for cash as U.S. auto sales have plummeted to a 25-year low, but GM is likely in the worst shape. It has burned through nearly $14 billion in the first nine months of this year and warned that it could reach the minimum amount of cash required to run the company by year’s end. Chrysler LLC isn’t far behind, but Ford Motor Co. says it can hang on through 2009 because of a huge loan it took out before credit markets froze up.

Detroit’s carmakers employ nearly a quarter-million workers, and more than 730,000 others produce materials and parts for cars. If just one of the automakers should declare bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.

Bragman said the CEOs have to do a better job of explaining the massive restructuring they have undertaken, including a host of new vehicles and a historic new contract with the UAW that cuts wages for new hires and shifts billions in retiree health care costs to a union-administered trust.

“Everything was in place, everything was on track, everything was looking very promising,” Bragman said, “and then, through no fault of their own, quite frankly, the economy went south and nobody bought anything.”

Also in msnbc.com business Answer Desk: Overpaid and bailed-out at banks? Your Career: ADA expands to cover more workers Venza sorta-crossover is Toyota’s latest mistake ConsumerMan: Chinese drywall remains a big threat   Video: This beer would cost you at least $8,000

MORE FROM AUTOS

Autos Section Front

GM reports $1.2 billion third-quarter loss 37 percent of U.S. Saab dealerships to close Ford: New police cruiser to replace Crown Vic Automakers turn to safety to sell cars Texan drives $1 million car into marshes Dirtiest vehicles on America’s highways GM needs new Buick, Chevy entries to be hits IntelliDrive program blends technology, safety Chinese automaker aims to compete globally CEO lays out ambitious Chrysler road map Autos Section Front   Add Autos headlines to your news reader: