GM and Chrysler to Shed 50,000 Jobs
US car giants General Motors and Chrysler have unveiled plans to axe 50,000 jobs and seek almost $20bn in additional bailout funds, on top of the $17.4bn they have already borrowed.
GM said it planned to cut 47,000 jobs – 26,000 from its plants outside the US - and close five more US factories than the nine already announced in December.
The firm revealed the moves as part of a plan submitted to the US treasury department on Tuesday on how it intends to become viable and repay its loans.
The US car maker is also looking to borrow up to $16.6bn more from the government, on top of the $13.4bn it has already received, warning it could run out of cash by March without new funding.
GM also says it expects to start repaying the government in 2012 and fully pay off the loans by 2017.
Meanwhile, smaller rival Chrysler said it intended to cut 3,000 jobs and seek an additional $5bn in bailout money, on top of the $4bn it has already received from the US treasury.
Company criticism
GM company conceded that it had not reached deals with bond holders and its major union to reduce some $47bn in debt, but vowed to work to reach those agreements by the end of March.
GM had requested $18bn in an unprecedented US government bailout in December and got $13.4bn.
US car makers have been badly hit by the ailing US economy, but they have also faced criticism for failing to adjust their market strategies and provide quality products for US consumers.
Danny Schechter, a financial commentator in New York City, said: "GM and Chrysler want a lot more [money], and it's not clear whether they are going to get it. There's a lot of pressure on the unions and the car companies to cut back, and do more for less.
"When you make a business projection you expect certain revenues coming in, those revenues are not coming in. There is a big supply chain for automobiles ... if the demand for cars goes down you are going to have a ricochet effect as this crisis ripples out, so the economic crisis spreads rather than narrows."
Chrysler cuts
Chrysler says it will shed 3,000 jobs and seek $5bn more in bailout money [EPA]
Chrysler, the third largest car maker behind Ford, had originally said it would need only an extra $2bn to survive the unprecedented economic decline.
Chrysler said it would reduce a manufacturing shift, remove 100,000 units from production capacity and cut costs by $700m.
The plan to shed jobs, close plants and reduce hours by GM and Chrysler comes just weeks after their chief executives were chastised in congress for flying to Washington DC in private jets to ask congress for bailout money.
The announcements on Tuesday came shortly after Barack Obama, the US president, also signed into law a $787bn economic stimulus package aimed at bolstering the flagging US economy.
GM said it planned to cut 47,000 jobs – 26,000 from its plants outside the US - and close five more US factories than the nine already announced in December.
The firm revealed the moves as part of a plan submitted to the US treasury department on Tuesday on how it intends to become viable and repay its loans.
The US car maker is also looking to borrow up to $16.6bn more from the government, on top of the $13.4bn it has already received, warning it could run out of cash by March without new funding.
GM also says it expects to start repaying the government in 2012 and fully pay off the loans by 2017.
Meanwhile, smaller rival Chrysler said it intended to cut 3,000 jobs and seek an additional $5bn in bailout money, on top of the $4bn it has already received from the US treasury.
Company criticism
GM company conceded that it had not reached deals with bond holders and its major union to reduce some $47bn in debt, but vowed to work to reach those agreements by the end of March.
GM had requested $18bn in an unprecedented US government bailout in December and got $13.4bn.
US car makers have been badly hit by the ailing US economy, but they have also faced criticism for failing to adjust their market strategies and provide quality products for US consumers.
Danny Schechter, a financial commentator in New York City, said: "GM and Chrysler want a lot more [money], and it's not clear whether they are going to get it. There's a lot of pressure on the unions and the car companies to cut back, and do more for less.
"When you make a business projection you expect certain revenues coming in, those revenues are not coming in. There is a big supply chain for automobiles ... if the demand for cars goes down you are going to have a ricochet effect as this crisis ripples out, so the economic crisis spreads rather than narrows."
Chrysler cuts
Chrysler says it will shed 3,000 jobs and seek $5bn more in bailout money [EPA]
Chrysler, the third largest car maker behind Ford, had originally said it would need only an extra $2bn to survive the unprecedented economic decline.
Chrysler said it would reduce a manufacturing shift, remove 100,000 units from production capacity and cut costs by $700m.
The plan to shed jobs, close plants and reduce hours by GM and Chrysler comes just weeks after their chief executives were chastised in congress for flying to Washington DC in private jets to ask congress for bailout money.
The announcements on Tuesday came shortly after Barack Obama, the US president, also signed into law a $787bn economic stimulus package aimed at bolstering the flagging US economy.
source: http://english.aljazeera.net
