TOPWRAP 7-US automakers seek aid, Europe looks to bolster banks

* Auto makers begin to detail turnaround plans

* EU seeking ways to get banks lending

* Reserve Bank of Australia cuts rates by full point

* Bank of Japan seeks to help cash-strapped companies

* U.S., European stocks rebound, Asian stocks tumble (For full coverage of the financial crisis [nCRISIS])

By Burton Frierson

NEW YORK, Dec 2 (Reuters) - U.S. automakers sharpened their pleas for a government lifeline on Tuesday and warned of a worsening economic crisis, while Europe and Japan took steps to pump credit into the economy.

U.S. stocks rose as much as 3 percent in the wake of Monday's stunning losses, helped by encouraging statements from Ford Motor Co (F.N). European shares gained 1.7 percent but Japan's stock market tumbled.

U.S. automakers began to deliver restructuring plans that Congress has demanded before reopening a debate on a $25 billion bailout the industry says it needs to survive. [ID:nN021255]

The car industry around the world has been reeling from flagging demand and evaporating consumer credit, forcing automakers to slash production to cut swelling inventories.

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

Ford became the first to release its plan, which asks for $9 billion of loans, cancels bonuses, proposes to cut dealers and initiates plans for electric cars. [ID:nN02193699]

Ford also said it expects to break even or be profitable in 2011. Investors seized on the outlook and looked past a 30 percent drop in November sales and a warning that the economy continues to weaken. Its shares soared as much as 13 percent.

Toyota Motor Corp (7203.T) said U.S. vehicle sales fell 33.9 percent and the Japanese automaker said it would chop management bonuses by 10 percent as it cuts back production in the face of collapsing sales. [ID:nT43280]

Other manufacturers reported similar drops in U.S. sales which appeared to have weakened from dire October levels. Analysts had expected heavy promotions to increase the annual sales pace slightly from the 25-year low set in October. [ID:nN01512979]

Chrysler LLC said it would not survive without an emergency government loan.

The company's president, Jim Press, added that bankruptcy for the smallest of the three Detroit automakers was not an option and that alliances would be an important part of the industry's future. He did not say how much privately-held Chrysler was seeking from the government.

HOW LOW CAN THEY GO?

In the financial sector, the European Commission promised measures to get state-aided banks to start lending but EU finance ministers squabbled over plans to counter the downturn.

Australia slashed interest rates and other countries are expected to follow this week. Australia's Reserve Bank cited the perilous state of the world economy when it cut the benchmark cash rate a full percentage point to 4.25 percent.

The Bank of Japan kept its key rate at 0.30 percent at an emergency meeting to deal with a cash squeeze on Japanese companies, which face slumping export markets. [ID:nT216819]

However, it unveiled 3 trillion yen ($32 billion) in new measures help corporate funding. The BOJ will accept a wider range of corporate debt, including for the first time debt with a triple-B rating, as collateral and launch a new scheme to make it easier for banks to make loans to companies.

Britain, the euro zone and New Zealand will almost certainly cut interest rates later this week. In addition to more rate cuts, the U.S. Federal Reserve is weighing other responses with its benchmark rate nearing zero.

Fed Chairman Ben Bernanke said on Monday further cuts in the U.S. benchmark rate below 1 percent were feasible.

Euro-zone producer prices fell more than expected month-on-month in October, data showed, underlining the scope for a deep ECB interest rate cut. [ID:nL2336404]

"The message for the ECB is clearly: don't worry about inflation, cut now, and a lot. I would say 75 basis points, it's a minimum," Bank of America economist Holger Schmieding said.

In Brussels, EU Competition Commissioner Neelie Kroes, facing pressure from member states to approve state aid to ailing banks, said the EU executive would approve new rules shortly. [ID:nL2402162]

Kroes also said the Commission expected banks that received state aid to give commitments to lend.

Finance ministers from all 27 EU nations had gathered in Brussels to discuss a proposal for governments to spend an extra 1.2 percent of GDP from their budgets to boost investment and consumer demand. [ID:nL2249791]

German Finance Minister Peer Steinbrueck said Berlin, Paris and other EU capitals were unhappy with the Commission approach to vetting state aid to banks.

The Commission said proposed German assistance for Commerzbank (CBKG.DE) did not meet EU rules on state aid.

The ministers agreed to increase the capital of the European Investment Bank (EIB), the EU's lending arm, by 67 billion euros ($84.7 billion), the EIB's president said.

In Asian markets, Japan's Nikkei average tumbled 6.4 percent as the yen surged. Hong Kong's Hang Seng index lost 5 percent.

BANKERS' BLUES

Britain's construction sector shrank last month at its fastest pace in more than a decade, squeezed by plummeting property prices and a lack of credit, which added to pressure on the Bank of England to cut rates by at least another percentage point on Thursday.

The pain also reached deeper into the workplaces of big financial players.

Switzerland's Credit Suisse AG (CSGN.VX) will cut 650 jobs and Britain's HSBC (HSBA.L) said it was cutting 500 as the worst financial crisis since the 1930s continues to bite. [ID:nL2189104]

Around 90,000 jobs have been axed at major global banks since September.

The Wall Street Journal reported Goldman Sachs (GS.N) 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. [ID:nBNG359558] (Additional reporting by Reuters bureaus worldwide; Editing by Tom Hals)