WASHINGTON — General Motors and Chrysler, seeking up to $21.6 billion in additional federal aid to survive, said their bankruptcy may cost the U.S. five times as much.
The two automakers, in their most detailed exploration of bankruptcy, said it could cost taxpayers as much as $110 billion to finance the companies’ Chapter 11 restructurings. In separate filings to the Treasury Department on Tuesday, they said filing may lead to liquidation, potentially costing millions of jobs.
Bankruptcy “would create unbearable stress not only for our suppliers but also the suppliers of other automakers,” Chrysler chief executive Bob Nardelli said in a conference call with reporters. “It would have a cataclysmic effect on the entire auto industry.”
President Barack Obama’s chief spokesman refused to rule out the possibility of the automakers restructuring through bankruptcy.
“I wouldn’t preclude policy choices, particularly since we haven’t seen details,” Robert Gibbs told reporters before the plans had been submitted. The auto companies “represent a huge part of our manufacturing base, and to have a strong and viable auto industry is tremendously important for the future.”
GM outlined three scenarios for bankruptcy in a progress report required under federal loans. If automakers fail to show by March 31 how they will become profitable, the Treasury Department can recall the money or require that it be used as bankruptcy financing.
