GM Loans May Top $30 Billion

Updated from Tuesday, Feb. 17

General Motors (GM Quote) now says it may need more than $30 billion in loans from the federal government, a sign that the outlook for auto sales has deteriorated precipitously since the start of the year.

The expanded request was part of the viability plan submitted to the Treasury Department on Tuesday. On a conference call with reporters, CEO Rick Wagoner noted that GM had sought $18 billion in December, when the Bush administration approved $13.4 billion. Additionally, he said, GM cannot assume its $4.5 billion revolving credit line will be renewed on maturity in 2011, so it wants the government to fund that.

Looking further ahead, if a newly revised, gloomier downside scenario for 2009 through 2011 pans out, GM could require another $7.5 billion, bringing the total to $30 billion. Beyond that, if GM must fund pension plans in 2013 and 2014 -- this is an open question, GM said -- the need could extend beyond $30 billion.

Comparing Tuesday's plan to the restructuring plan GM presented to Congress in December, Wagoner said: "Today's plan is significantly more aggressive because it has to be. The condition of the U.S. and global economies as well as the auto industries has significantly deteriorated."

Now, GM fully anticipates the worst-case scenario it outlined in December, one that includes 2009 domestic vehicle sales of 10.5 million and global sales of 57.5 million. And it has developed a new, even gloomier downside scenario that anticipates domestic volume of 9.5 million in 2009 and 11.5 million in 2011. The last time domestic volume fell below 10 million, according to J.D. Power & Associates, was 1970, when sales totaled 9.8 million.