U.S. automakers seek aid, Europe looks to bolster banks

By Burton Frierson

NEW YORK (Reuters) - U.S. automakers sharpened their pleas for a government lifeline on Tuesday and car companies around the world cut costs and production as the global economic crisis continued to ravage the industry.

Europe and Japan sought new ways to make credit available in an effort to roll back the tight lending conditions that have pushed the world's largest economies into recession and sent manufacturers into a deep slump.

U.S. automakers began submitting plans to Congress as they tried to show they have a viable future. Ford Motor Co led off with a request for a $9 billion credit line and promised big changes ahead of the government review.

General Motors Corp asked the U.S. government to save it from failure by extending $12 billion in loans and another $6 billion in a credit line.

While critics have charged that many of the problems plaguing Detroit's Big Three are of their own doing, politicians worry that without government aid, the companies could collapse and millions of jobs would be lost.

"The greater the delay in help, the more damaged the industry becomes," Michigan Gov. Jennifer Granholm said in an interview with Reuters.

"Because Congress has not acted, even if nobody has declared bankruptcy, nobody is in the showrooms of this industry because they don't know whether Congress is going to act," she added.

GM, Ford and Chrysler failed two weeks ago to obtain a $25 billion bailout from lawmakers unconvinced that taxpayer money would be well spent considering the industry's horrible financial prospects.

The global car industry has been reeling from flagging demand and evaporating consumer credit, forcing automakers to slash production to cut swelling inventories, though the pain has certainly not been limited to them.

Industrial conglomerate General Electric Co plans to scale back its hefty finance arm and cut jobs across its range of businesses as it braces for what it expects to be a worsening economic environment next year, executives said.

The Wall Street Journal reported Goldman Sachs was likely to report a net loss of as much as $2 billion for the fourth quarter, its first loss as a publicly listed company.

RUNNING ON EMPTY

Still, the car industry's troubles were front-and-center on Tuesday, with further news of production cuts and tumbling vehicle sales in Europe, Asia, Africa and the United States.

World No. 2 truck maker Volvo said order bookings had fallen "substantially" as the financial crisis weakened market demand, prompting it to cut some production in the fourth quarter.

U.S. auto sales fell for the 13th consecutive month in November, led by a 41 percent drop at General Motors Corp, and major automakers said there was no sign that demand would rebound in the next six months in the world's largest vehicle market.