- The Washington Times - Wednesday, February 18, 2009

Chrysler LLC, the privately held auto maker that received a $4 billion government bailout in December, requested another $5 billion in government loans Tuesday.

As part of its restructuring plan, Chrysler pledged to cut 3,000 jobs, reduce production capacity by 100,000 vehicles and lower fixed costs by $700 million this year.

In its report filed with the Treasury Department, Chrysler claimed it had reached important agreements with its labor unions, dealers and suppliers. Those agreements, Chrysler said, would reduce its labor costs so that it would be competitive with the labor costs of foreign auto makers operating plants in the United States.

The United Auto Workers announced Tuesday it had reached tentative agreements with Chrysler, General Motors and Ford.

“The changes will help these companies face the extraordinarily difficult economic climate in which they operate. Discussions are continuing regarding the Voluntary Employee Beneficiary Associations (VEBAs) at all three companies,” the UAW said.

“The UAW is withholding the terms of the tentative understandings pending completion of the VEBA discussions and ratification of the agreements.”

Chrysler’s sales plunged 55 percent in January compared to a year ago.

General Motors, which received $9.4 billion in government loans last year and another $4 billion this year, will be filing its own restructuring plan Tuesday seeking still more taxpayer-funded aid.

GM’s share price fell 13 percent Tuesday, closing at $2.18, down more than 90 percent from its 52-week high.

When the Bush administration approved $9.4 billion in loans to GM in December, it pressured bondholders to reduce GM’s debt as much as two thirds in exchange for equity interests. But bondholders have been holding out, insisting on concessions by workers.

U.S. auto sales have dropped nearly 40 percent during the past year, as the U.S. economy shed more than 3.5 million jobs since entering recession in December 2007.

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