Chrysler: We Need $2 Billion More

The ailing automaker tells the Treasury Department it's hamstrung by sales.
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Chrysler

wants $2 billion more on top of the $7 billion loan it initially sought from the federal government.

The company also said Tuesday that it will eliminate the Aspen, the Durango and the PT Cruiser from its product line this summer.

The privately owned automaker, in submitting its viability plan to the Treasury Department on Tuesday, said it needs more money due to the unprecedented decline in U.S. vehicle sales, which it now projects to be 10.1 million in 2009, a 40-year-low, followed by average sales of 10.8 million between 2009 and 2012. For Chrysler, that means sales of 720,000 vehicles annually, assuming a 10% market share, resulting in $18 billion in lost revenue.

"We fully understand the need to adapt to significantly reduced annual U.S. sales and to national concerns over energy security and climate change." said CEO Robert Nardelli, in a prepared statement.

General Motors

(GM) - Get Report

is expected shortly to release the details of its own restructuring plan and follow that up with a news conference at 6:30 p.m. EST. GM has received $13.4 billion in government loans -- $4 billion of that on Tuesday.

Ford

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is not seeking government loans.

The viability plan is based on reducing production, launching 24 new vehicles including electric vehicles over 48 months, and entering a strategic alliance with

Fiat

. In 2010, Chrysler would introduce a hybrid version of its best-selling vehicle, the Dodge Ram as well as its first electric-drive vehicle.

Chrysler said it will finalize the plan by the March 31 deadline and will complete the aggressive restructuring that has already resulted in a $3.1 billion reduction in fixed costs and in shedding 32,000 jobs, or 37% of its workforce. In 2009, the company intends to cut 3,000 additional workers and $700 million more in fixed costs.

The company also expects to reduce debt by $5 billion and to convert 100% of existing second lien debt to equity.