GM and Chrysler to submit survival plans

Whether General Motors and Chrysler continue getting billions of dollars in federal loans is the question facing government officials as they prepare to review the "viability plans" from the ailing automakers as part of the terms of their bailouts. ┬á The car companies must submit their proposals by 5 p.m. today to James Lambright, chief investment officer for the Troubled Asset Relief Program.┬á Under the terms of their federal loans, GM and Chrysler must submit plans to show how they are using taxpayer dollars to become viable businesses. The plans are supposed to include agreements with the United Auto Workers union on labor-cost reductions and deals with bondholders and other creditors for reducing their debt. ┬á Both conditions have proven to be serious sticking points during negotiations with bondholders and the UAW, which represents tens of thousands of employees. ┬á Chrysler eliminated 4,300 salaried positions in December through retirements and buyouts while GM is cutting 10,000 salaried jobs, including 3,400 in the US. GM is also offering buyouts for 22,000 hourly workers.┬á A GM spokesman said that, in accordance with an agreement the automakers reached with the UAW in 2007, the workers replacing those who take buyouts will be paid less, bringing down the company's average labor costs and helping it comply with another loan termÔÇöthat the companies reduce workers' average pay to be competitive with US wages for Toyota, Honda and Nissan employees.┬á GM and Chrysler have also ended their ÔÇ£job banks,ÔÇØ which allowed laid-off workers to retain most of their salaries until they were offered new auto jobs.┬á GM was less successful in fulfilling another government loan requirementÔÇöthat it sell its fleet of seven private jets. The jets are up for sale, but there are no offers. The US Treasury will be studying the viability plans for several weeks before making a decision whether to call in or extend the loans. The decision is due by the end of March.