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Ailing U.S. carmakers submit recovery plans
Tuesday, 02 December 2008, 20:30 IST
Washington: The three struggling U.S. carmakers were required to submit viable recovery plans to Congress Tuesday for getting access to federal aid as monthly car sales in the US tumbled more than 30 percent.
Congressional leaders last month rejected the carmakers' request for a total of $25 billion to help them restructure and stay out of bankruptcy. Lawmakers said they needed more concrete details on the companies' recovery plans before considering the bail-out.
Ford Motor Co unveiled its 33-page business plan Tuesday morning, requesting a $9-billion "bridge loan" to rescue it from a US economic recession that has sharply curbed US car sales.
"For Ford, government loans would serve as a critical backstop or safeguard against worsening conditions, as we drive transformational change in our company," chief executive Alan Mulally said in a statement.
Ford, which is generally regarded as in the best shape of the so- called Big Three carmakers, said it was not certain to require the cash infusion.
By contrast both GM and Chrysler LLC, who were to submit their own plans later Tuesday, have said they may not have enough money to continue daily operations beyond 2008.
The proposals come as sales plunged in November by 35 percent industry wide, compared to the same month in 2007. General Motors Corp's sales dropped 41 percent, Ford's fell 30 percent and Toyota Motor Corp was down 34 percent.
Auto sales dropped in October to their lowest levels in 25 years as consumers struggled to get car loans, but lawmakers have argued the automakers' antiquated business model put them in dire straits well before the current economic crisis began.
The heads of Ford, GM and Chrysler will appear before Congress for hearings Thursday and Friday to discuss their newest proposals.
The Big Three have warned that bankruptcy could cost millions of jobs and insisted their recoveries, which primarily involve a shift to more fuel-efficient vehicles, had been well under way before the financial crisis struck.
Mulally offered to accept a salary of $1 for one year should Ford access the cash infusion. The company also said it would sell its five corporate jets.
When the three chief executives first pleaded for a bail-out in front of Congress last month, their arrival in Washington in private jets provoked massive public outrage.
Source: IANS
Source: IANS