WASHINGTON (AP) -- General Motors Corp. and Chrysler LLC, two venerable titans of American industry, will burn through $17.4 billion in government loans in three months and want billions more to stay alive.
The ink is still drying on their new requests for an additional $21.6 billion, but for President Barack Obama's month-old administration, there are no easy answers.
Give them more money? GM and Chrysler could return seeking more. Let them slip into bankruptcy? Hundreds of thousands of jobs could be lost. Try a government-led bankruptcy? In GM's case, that might cost up to $100 billion.
"There can't be a bottomless pit to this. There aren't the resources to deal with it," White House press secretary Robert Gibbs said Wednesday as the government began reviewing the automakers' plans.
"We have to get a sustained path to that restructuring to ensure that there isn't a constant necessity for continued government intervention and money from the taxpayers," Gibbs said.
At stake is much more than the future of the PT Cruiser or the Saturn Vue. Jobs at assembly plants, car dealers, parts suppliers and the small businesses that serve them could be at risk in a fatigued economy in which nearly 12 million people are unemployed, including about 600,000 who got pink slips last month.
"This is an entire way of life here," said Republican Rep. Thaddeus McCotter, who represents a district near the auto industry's hometown of Detroit. "An entire state is hanging in the balance."
Even if Obama meets GM and Chrysler's requests for an additional $14 billion in loans and the companies execute the turnaround plans they released Tuesday, it would come with a painful price: An estimated 50,000 workers worldwide would lose their jobs and five more U.S. plants will be closed.
Any deal requires painful concessions from the United Auto Workers, dealers and debt holders, who are mulling plans to swap two-thirds of their holdings for equity as required by the loan terms set by the Bush administration. Shareholders who have watched GM stock drop as low as $1.70 per share in November will see their stake significantly diluted.
GM shares fell 12 cents, or 5.5 percent, to $2.06 Wednesday as investors digested the company's prognosis.
GM and Chrysler, which initially received $13.4 billion and $4 billion, respectively, are now asking the government for a total of $39 billion, saying they need more loans due to a U.S. auto market where sales have fallen to depths not seen in more than a quarter century.
Without additional aid, GM said it will run out of money in March.
Ford Motor Co., which borrowed billions from private sources before credit markets tightened, has said it can make it through 2009 without government help.
Obama's administration first must make the difficult determination of whether it's worth making the loans to save the companies, Fitch Ratings analyst Mark Oline said Wednesday. If the objective is to keep GM operating, then Obama must pick the least-costly path, Oline said.
Both companies painted bleak pictures of bankruptcy, arguing it would cost the government more to finance than bailing them out. The companies have said there's no private financing available now, so they would go straight to liquidation unless the government stepped up.
GM said Chapter 11 bankruptcy would cost at least $45 billion, and in one pessimistic scenario, $100 billion. Chrysler CEO Bob Nardelli said his company would need up to $25 billion in financing.
Oline said loans would be cheaper than bankruptcy because of high legal and other costs and the possibility of scaring customers away.
"There are a lot of uncertainties to how much revenues would be damaged in a bankruptcy filing," he said.
Some congressional Republicans have argued for bankruptcy to cut the automakers' labor costs and debts, but Oline said that might not be as necessary, with the UAW agreeing Tuesday to modify their 2007 contracts with GM, Chrysler and Ford.
"The UAW and GM have done a pretty good job of dealing with a lot of those concerns outside of bankruptcy," he said.
Unresolved, though, is a deal for the union to accept half of the companies' payments into a retiree health care trust as equity instead of cash.
The mind-numbing numbers will confront Obama's new auto task force, which is expected to meet this week. The panel will try to squeeze concessions from stakeholders and remake GM and Chrysler into profitable entities.
Sen. Bob Corker, R-Tenn., who discussed GM's plan with CEO Rick Wagoner on Wednesday, said the Obama administration needs to make it clear to everyone that they must meet the conditions of the government's loan agreement.
"Both the bondholders and the UAW have got to know that this is real and that it has to happen, otherwise it won't occur," Corker said.
The automakers' ballooning loan requests come after months of wrangling in Congress over the financial industry bailout, the auto industry's first loan requests, and a $787 billion economic stimulus plan, so opposition is likely.
"While no one in this country wants to see the auto industry fail, we cannot expect American taxpayers to bail out poorly run auto companies forever," said Pat Toomey, a former Pennsylvania GOP congressman who leads the anti-tax group Club for Growth.
GM Chief Operating Officer Fritz Henderson said the Detroit company's restructuring plan is based on conservative projections and is "one that would not require us to do this again."
GM, whose entire request grew to $30 billion, expects to spend $14 billion more than it takes in this year. The company's cash burn, though, is projected to drop to $3.8 billion next year, and it predicts positive cash flow of $6.6 billion in 2012.
"We expect '09 to be another exceptionally challenging year and particularly the first quarter, the first half of the year, as we get our inventories in line and as we add adjust our business," Henderson told industry analysts Wednesday.
But the company said with the restructuring, which calls for 47,000 job cuts, it could turn a profit by 2010 and fully repay its loans by 2017.
Chrysler, whose majority owner is private-equity firm Cerberus Capital Management LP, disclosed that it lost $8 billion last year and expanded its loan request to $9 billion. The company said it would cut 3,000 jobs and shed three models.
Oline said Chrysler's expense cuts and its loan request are far smaller than GM's because Chrysler already has made drastic cuts. The Auburn Hills, Mich., company, for instance, slashed its white-collar work force by 25 percent last year.
But Chrysler, he said, still has a revenue problem with sales down more than 50 percent for the past two months, and it likely will have to take on a partner to survive.
"There are pockets of Chrysler, such as the Jeep brand, certainly the pickups and the minivans, that certainly have some viability longer term," Oline said. "But I don't think anyone expects Chrysler to be in its current form three or four years from now."
Chrysler has a preliminary deal with Italy's Fiat Group SpA to provide small-car technology in exchange for a 35 percent Chrysler stake. Fiat could use Chrysler's U.S. distribution network and could distribute Chrysler vehicles overseas. But the deal is contingent on Chrysler getting an additional $3 billion in government loans.
AP White House Correspondent Jennifer Loven contributed to this report. AP Auto Writer Tom Krisher reported from Detroit.