UAW: GM, Chrysler may not need additional federal funds

UAW President Ron Gettelfinger said today that General Motors and Chrysler LLC may not need additional federal loans beyond the $17.4 billion approved by the White House.

"If we can get by without more money, that's what we want to do," Gettelfinger told Automotive News in an interview at Solidarity House in Detroit.

He said how well the money holds out will depend on sales volume this year. Gettelfinger said he hopes sales will not dip more than 1 million units below 2008's depressed 13.2 million.

The $13.4 billion earmarked for GM may be sufficient, said a source close to the company.

When asked directly whether GM plans to ask for money beyond the $13.4 billion, the source answered, "no."

"We've got enough" money from the loan, the source said, "in terms of what our downside scenario is" for U.S. sales this year.

"The downside was 10.5 million, which is where most people are," the source said. "What happens if that downside gets worse? That's anybody's guess."

Chrysler and GM have received $4 billion each to date. GM is slated to get an additional $5.4 billion on Jan. 16. GM would get $4 billion more on Feb. 17 if Congress authorizes additional federal loans under the $700 billion banking bailout legislation passed last fall.

In December, GM requested $18 billion in federal loans, saying that was what it needed to make it to 2010. That number factored in GM's 49 percent stake in its struggling financial unit, GMAC Financial.

But GMAC gained status as a bank holding company and secured $6 billion of its own federal funding. The U.S. Treasury Department gave GMAC $5 billion in exchange for preferred stock in the financing company and lent GM $1 billion to invest in GMAC.

"So in actuality," said the source familiar with GM's finances, the amount the government delivered "was substantially higher than the $18 billion GM asked for."

By Jamie LaReau and David Barkholz- Automotive News