Autos task force to announce plan Monday

By Kevin Krolicki and David Bailey

WASHINGTON/DETROIT (Reuters) - President Barack Obama will announce the next steps to help General Motors Corp and Chrysler LLC on Monday, the White House said, amid signs of progress for GM in talks aimed at slashing its debt and cutting costs in response to slack demand.

GM Chief Executive Rick Wagoner was in Washington on Friday to meet with the autos task force, led by former investment banker Steve Rattner, which Obama has charged with overseeing emergency lending to the automakers and their suppliers.

Shares of GM gained almost 6 percent and have rallied by more than 30 percent over the past 10 trading sessions amid growing confidence that officials will not push the top U.S. automaker into bankruptcy.

A White House spokesman said the panel was in the process of completing about six weeks of closed-door meetings with industry executives, analysts and others with a stake in the survival of the U.S. auto industry.

"The president's autos task force is meeting today. I think they are winding down the decisions that have to be made and putting in place a plan that the president will announce on Monday," White House spokesman Robert Gibbs said.

"The president, I think, will outline what he thinks is the best way forward to achieve viability for the companies in both the short term and the longer term," Gibbs said.

As part of its effort to slash costs and sell assets, GM has mandated Commerzbank to help find a new investor for its German Opel unit, according to a source.

GM and Chrysler have taken $17.4 billion in emergency funding from the U.S. Treasury and have asked for another $22 billion to complete cost-cutting programs and ride out the weakest market for new cars in almost three decades.

U.S. auto suppliers have also won a $5 billion aid package intended to free up liquidity for a cash-strapped sector that analysts had warned was at risk for cascading failures.

Auto sales have been at 27-year lows so far this year and many analysts believe that March sales data, set to be released next Wednesday, will show a further weakening in demand.

Analysts expect March U.S. sales to be just above 9 million vehicles on the annualized basis tracked by the industry, down sharply from 13.2 million in 2008 and below the level of demand forecast by GM and Chrysler under their cost-cutting plans.

But Barclays Capital analyst Brian Johnson said the recent statements from the White House "could imply a willingness from the government to support both restructuring plans 'as is' instead of pushing for deeper cuts."

Those more painful actions could have included a Chrysler merger or a GM bankruptcy filing in order to push the automakers toward a lower cost structure, he said in a note fro clients.

GM CONCESSION TALKS PROGRESS

The loans for GM and Chrysler approved under the Bush administration set a March 31 deadline for them to prove they can be made viable in order to win new government funding.