General Motors could need further $16bn (£11.2bn) in government loans to prevent it collapsing, according to the ‘viability plan’ handed to US treasury on Tuesday evening.
When added to the $13.4bn (£9.4bn) GM has already received, the total cost of preventing the car maker failing could reach a massive $30bn (£21bn).
GM, the world’s second largest car maker, has said it will definitely need $22bn (£15.4bn) in government loans, but if the US car market deteriorates further in 2009 it will need an additional $7.5bn (£5.25bn). GM says that it will start to repay the loans from 2012.
The company is slashing a total of 47,000 jobs globally this year and, by 2012, will have closed another 14 of its factories. It will also reduce its number of dealerships from 6200 to 4100 by 2014.
When asked how GM had got into such a serious financial situation, Rick Wagoner, GM Chairman and CEO, said that aside from the global collapse in car sales, GM had needed to spend $103bn (£72bn) on “post-retiree costs” over the past 15 years.
Wagoner also ruled out bankruptcy and restructuring for GM as “risky, costly and time consuming”.
GM also made clear that it wants help from the German, Canadian and Swedish governments to help prop up its overseas divisions during the global downturn.
Discussions with the German government over bailout funds for Opel are “ongoing” but “far from a final resolution” according to Wagoner. He would not comment on reports that at least two Opel factories could be closed.