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“It’s not whether you buy the car or don’t buy the car,” he said, but rather whether bankruptcy would put “unbearable stress” on the whole chain of auto manufacturing and auto dealers that rely on the car companies. “It would have a cataclysmic effect on the auto industry.”

Mr. Nardelli described the additional loan he is requesting from the Treasury, which he would like to receive upon approval of his restructuring plan on March 31, as “bridge financing to get us through this economic trough.”

Chrysler is predicting that U.S. auto sales will fall to a 40-year low of 10.1 million this year before picking up again in 2010 and 2011. It hopes to pay off its Treasury loans by 2012. GM presented a significantly brighter outlook, saying it expects sales to pick up to 11.5 million to 12 million in the next year, which would enable it to return to profitability within two years.

Despite weeks of negotiations with the United Auto Workers and bondholders, the companies said they were not able to obtain concessions in key areas targeted by the Treasury when it provided loans in January: reducing GM’s $27.5 billion in public debt by two-thirds and securing agreement from the union to accept stock instead of cash contributions to their retiree health care funds.

Just before announcing the plans, however, the companies said they obtained concessions from the unions on some work rules as well as abandoning the job bank program, which provides supplemental unemployment benefits for laid-off workers.