Chrysler has said it needs another $5bn (£3.5bn) in loans from the US government to stay afloat, according to the company’s viability plan submitted to the US treasury.
The ailing car maker received a $4bn (£2.8bn) emergency bailout in December but says it needs another $5bn(£3.5bn) by 31 March this year.
Chrysler has also said that it has now restructured it operations so that it will be able to stand on its own feet once it receives the second loan. It intends to start repaying the government loans from 2012.
Part of the survival plan is for Chrysler to press on with what it calls a ‘global alliance’ with Fiat. Company sources say that Fiat and Chrysler employees are already some weeks into establishing platform and component sharing programs.
Although it intends to use Fiat’s smaller front-drive platforms, Chrysler says that some of its own technology will be used by Fiat.
Chrysler also emphasized that the alliance was not crucial to Chrysler staying afloat.
In a conference call with journalists, immediately after handing over its viability plan to the US treasury, Chrysler bosses outlined the extent of the collapse in the US new car market.
The company expects new car sales to average 10.1 millions units annually – the lowest for 40 years and massively down on the 16 million units enjoyed in recent years. Chrysler also expects the market to stay at this level until 2012.
But Chrysler says it has now ‘right-sized’ itself to cope with a much-reduced market, cutting its production capacity by 1.3 million units, some 30 per cent.
Chrysler will also axe another three models, announcing that production of the Chrysler Aspen and Dodge Durango SUVs will not restart. The Chrysler PT Cruiser will also be canned this summer. Despite this, Chrysler has said that it plans another “24 product launches in the next 48 months”.