SCENARIOS: What to expect from U.S. auto bailout

DETROIT (Reuters) - Congress and the White House moved closer on Tuesday to a deal that would clear the way for a $15 billion bailout of struggling U.S. automakers.

Discussions are based on the $15 billion rescue package proposed by Democrats, a key provision of which is the creation of an oversight office to be led by a presidentially appointed trustee, or "car czar."

Here's what to expect as lawmakers work toward a vote on the proposed bailout this week.

IF THE BAILOUT PASSES

The loans would support the cash needs of the automakers through the first quarter, sending the companies back to work on more detailed plans that will include a new round of negotiations with the United Auto Workers union.

The car czar would have broad power to monitor progress and could withhold new funding if the automakers lagged.

The automakers would be required to work with the car czar to submit finalized restructuring plans by the end of March. Those plans would have to show that creditors, investors and the union were all making financial concessions.

THE SITUATION AT GM

General Motors Corp has requested $4 billion by the end of December to avoid failure and $12 billion by March.

Even if GM receives a majority of the $15 billion loans, the funds would provide only limited breathing room, and some analysts have said a Chapter 11 bankruptcy filing would still be a possibility.

Under proposed rescue package, the government would receive stock warrants for 20 percent of the value of its loan. Those stock warrants could lead to the government owning half of GM, according to Barclays analyst Brian Johnson.

That could make it difficult to offer enough equity to bondholders and the UAW. The UAW is under pressure to take up to $10 billion in stock in the restructured GM in place of half of the funds owed by GM to a retiree health-care trust.

Because the government loans would be senior to all other obligations, GM would have to negotiate new terms on about $6 billion in secured debt.

Under its restructuring plan, GM would shut down at least nine plants and cut another 30,000 workers.

THE SITUATION AT FORD

As a result of borrowing more than $23 billion in 2006, Ford has enough liquidity to get through next year -- if the economy does not worsen and its rivals avoid failure.

Ford would benefit if GM and Chrysler receive a capital infusion, preventing a potential cascade of failures in the interlocking network of parts suppliers.

Still, Ford is headed for a wrenching restructuring that includes trimming its dealer and supplier networks. Ford is in talks with the UAW to further reduce costs.

But risks remain. Ford's liquidity outlook is based on expectations auto sales will improve substantially by 2012.

THE SITUATION AT CHRYSLER

Because Chrysler LLC is majority-owned by private equity firm Cerberus Capital Management, the government loans would be considered a loan to Cerberus.

But for that reason the bailout is controversial and federal aid would put Cerberus under further scrutiny.

Several lawmakers remain opposed to bailing out Chrysler, demanding Cerberus explain why it cannot provide help.

Even if Chrysler receives the $4 billion it said it needs to survive through the first quarter, the No. 3 U.S. automaker still has to prove it has a plan to survive beyond March 2009.

Analysts have said Chrysler has no option but to merge with another automaker to survive, while some Republicans suggested Chrysler should revive a now-shelved merger with GM.

If there is no GM merger, analysts see Cerberus looking for another acquirer or moving forward with a plan to liquidate Chrysler by selling off the assets that can find buyers.

THE SITUATION FOR THE UAW

The UAW will have to reopen its landmark 2007 contract agreements with GM, Ford and Chrysler. In the deals, the UAW agreed to steep concessions on wages and benefits.

Under mounting pressure for more concessions, the union has already pledged to scrap a controversial provision of its contracts that put idled workers into a "Jobs Bank" where they collect almost full wages and benefits.

The UAW has also agreed to allow the automakers to delay payments to the retiree health care trust. Under previous plans, GM was required to pay $7 billion to the VEBA by January 2010, Ford $4.4 billion and Chrysler about $3 billion.

IF THE BAILOUT FAILS IN CONGRESS

GM and Chrysler have said they could be forced to bankruptcy within weeks if they do not obtain federal funding.

Analysts say bankruptcy would quickly lead to liquidation because consumers would not buy from a bankrupt automaker.

Domestic and foreign automakers share thousands of suppliers and analysts say the collapse of a Detroit automaker could touch off a cascade of failures in the supply sector.

(Editing by Matthew Lewis)