Automakers desperate bailout plea gaining support

By Kevin Krolicki and John Crawley

DETROIT/WASHINGTON (Reuters) - A top lawmaker predicted Washington would approve a bailout for U.S. automakers after they submitted survival plans and two of them, General Motors Corp and Chrysler LLC, said that without an immediate infusion of cash they could fail soon.

U.S. House Speaker Nancy Pelosi, a California Democrat, said Washington had little choice about helping automakers who say they account for one-in-10 American jobs. "I believe that an intervention will happen either legislatively or from the administration," Pelosi said. "I think it's pretty clear bankruptcy is not an option."

The Big Three automakers asked for a combined $34 billion in loans and credit lines on a day when they reported that in November they suffered a further dramatic slump in sales.

General Motors asked for $18 billion in loans and credit lines from the federal government, saying it urgently needs $4 billion of the money by the end of December to pay its bills.

Ford Motor Co told Congress it needs a $9 billion taxpayer-funded line of credit and promised big changes ahead of the government review.

Chrysler LLC, the smallest and most financially fragile of the Detroit automakers, requested $7 billion by the end of this month, saying that without the aid its cash could fall below the minimum level needed to operate in the first quarter of next year. The company also said it was seeking partnerships, a strategic alliance or merger.

Democratic leaders demanded a deep range of commitments from the companies to cut costs and map a clear path to regain competitive footing.

Senate Majority Leader Harry Reid, a Nevada Democrat, said he planned to introduce legislation on the Senate floor by Monday aimed at helping the U.S. business icons.

"We're looking to make sure we do everything we can to take care of the auto industry, if in fact it's viable," Reid told reporters at an energy event.

There's plenty of political pressure in the Democratic-led Congress to help the auto industry. Lawmakers realize that if major carmakers shut down, the overall U.S. economy would likely get worse, driving up unemployment and further rattling an already distressed Wall Street and housing market.

This would make Barack Obama's job even tougher when he takes over as U.S. president on January 20, one with an ambitious Democratic agenda which includes steps to expand health care, upgrade education and provide middle-class tax cuts.

The companies' pleas for federal help were bolstered by new data showing U.S. auto sales fell for the 13th straight month in November. Sales at GM plunged 41 percent during the month.

A U.S. economic recession and credit freeze mean there is little chance of a swift sales rebound in the world's largest vehicle market.

"We're trying to preserve our way of life and preserve our jobs," Chrysler President Jim Press said in Baltimore, where Chrysler exports 150,000 vehicles annually.

Many Democrats are angry that automakers have long resisted calls to increase fuel efficiency, but Democratic leaders feel a bailout is needed to save millions of jobs represented by Democratic-allied unions.