After Congress rejected the big three's bid for $25 billion dollars in government loans last month, they have returned to Capitol Hill and are now requesting $34 billion dollars in aid. Both GM and Chrysler are stating that they potentially face imminent collapse by the end of the year should the bailout package fail to pass.
A major sticking point in the last round of testimony for the original loan package was that members of Congress took issue with the fact that the automakers failed to provide details on how the companies would emerge from their current financial crisis and repay the loans. The fact that the CEO's took private jets to ask for a bailout didn't sit well with the lawmakers either, so this time they have decided to drastically change course.
All three CEO's have agreed to work for a $1 a year and Rick Wagoner will drive a Chevy Volt mule to Washington while Alan Mulally will drive a Ford Escape Hybrid. On top of this the companies will present detailed plans which call for drastic cost-cutting and a major restructuring, all in an effort to show Congress how the big three will remain viable and return to profitability.
GM is requesting a total of more than $18 billion dollars, while Ford wants $9 billion, and Chrysler is asking for $7 billion. Both GM and Chrysler are asking for a portion of the government loan package to be paid by the end of the month. The companies say they need this immediately or else they will be unable to pay suppliers and other bills next month. GM stated that defaulting on payments to suppliers could potentially cause them to collapse and thus affect the whole automotive industry and the overall U.S. economy.
