WORLD> America
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WORLD> America
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Chrysler urges bailout, Washington split
(Agencies)
Updated: 2008-11-14 08:50 DETROIT -- Goldman Sachs suspended its rating on General Motors Corp on Thursday and said the automaker needs at least $22 billion in federal aid, while Chrysler said it would be "very difficult to survive" without government support.
But US lawmakers remained deeply split over whether to bail out the US auto industry, and US Treasury Secretary Henry Paulson said any federal aid for the automakers must ensure their long-term viability. Chrysler LLC Chief Executive Bob Nardelli said Chrysler was losing money due to a decline in US auto sales to 25-year lows, and said Chrysler would seek federal money for its liquidity and restructuring needs. In one of his few appearances since merger talks between GM and Chrysler broke off, Nardelli said Chrysler must have broader ties with US automakers or alliances with overseas competitors to ride out the industry downturn. The auto industry has stepped up lobbying efforts to get government support and the heads of the three US-based automakers are expected to testify next week before a congressional committee considering aid for the industry. The Bush administration said the government could quickly disburse $25 billion in loans already approved by Congress. However, the administration has responded coolly to an aid plan being shaped by Democrats, which includes using part of the $700 billion financial rescue package to provide additional liquidity for the auto industry. US President-elect Barack Obama is considering appointing someone to lead efforts to help the auto industry return to health, an Obama aide said on Thursday. The sales slide that began in the United States has spread to the rest of the world because of the credit crisis. On Thursday, data showed that auto sales in Europe fell 15 percent in October from a year ago. Goldman Sachs forecast that GM would end 2008 with $12.5 billion in cash, within the $11 billion to $14 billion minimum range GM has said it needs to operate, requiring the No. 1 US automaker to seek government assistance. GM's shares, which hit a 65-year low this week, closed down 13 cents, or 4.22 percent, at $2.95, as investors awaited news on any government rescue. Goldman Sachs said a new program to support the auto industry was most likely, though the timing was uncertain. Also on Thursday, JPMorgan cut its GM rating to "neutral" from "overweight" and said the automaker needs "something immediately" to make it through the end of the year. JPMorgan, which also slashed its target price for GM stock to $1.84 from $3.08, said a government bailout could easily reach $30 billion unless GM reforms its vast liability structure. The warnings come in the wake of GM's deeper-than-expected third-quarter loss and cash burn, announced on Friday. |
