Auto Companies Asking for More Money By: Jake Kuss

In the midst of the current financial crisis, the big three automakers (GM, Ford, Chrysler) are asking for more money for their bailout plan:

NEW YORK (CNNMoney.com) — Automakers submitted their turnaround plans to Congress Tuesday with the hopes of winning approval for a lucrative loan package they claim is necessary for their survival.

The plans included salary cuts for top executives, the sale of corporate jets by General Motors and Ford and the possible elimination of two GM brands – Pontiac and Saturn. But the Big Three are also now asking the government for as much as $34 billion instead of the $25 billion they originally wanted.

General Motors, the nation’s largest automaker, said late Tuesday afternoon that it is seeking up to $12 billion to survive into 2010 and that it anticipates using $4 billion of that just this month in order to avoid bankruptcy.

But GM said it is also requesting an additional $6 billion line of credit to provide more funds should a severe market downturn persist.

Ford (F, Fortune 500) is asking for $9 billion. The company said it hopes that it will not need to use the federal loans though and that it should be able to return to profitability by 2011. But it said it would like to be able to have access to the funds as a backstop.

Chrysler LLC confirmed its previous request for a $7 billion loan that it made at Congressional hearings two weeks ago. So the automakers are asking for at least $28 billion and as much as $34 billion under the three plans.

The plans were submitted on the same day that the auto industry reported the worst U.S. sales in 26 years. Both U.S. and top overseas automakers all reported sales declines of more than 30% from year-ago sales, increasing the level of urgency for the beleaguered Big Three.

Sen. Carl Levin, D-Mich., a strong advocate of the bailout, said he is confident Congress will return next week to approve a loan package. He said he’s not concerned about the higher price tag being requested and added that members of Congress wanted an honest accounting of how much might be needed in a worst case scenario.

Speaking at a press conference Tuesday afternoon, House Speaker Nancy Pelosi, D-Calif., also said that it was imperative that the automakers get immediate federal assistance.

“Bankruptcy is not an option. Everyone is disadvantaged by bankruptcy. It takes too long. What takes a year we can do in a few weeks. … I don’t think anyone wants to see bankruptcy,” Pelosi said.

But Pelosi wouldn’t commit to having Congress return next week to pass a Big Three bailout. She said if Congress does not return, the Treasury Department should use money available under the previous $700 billion Wall Street bailout to tide the automakers over until early next year.

It’s not clear if the Treasury Department would do this since the Bush administration has endorsing the idea of aid for the automakers but opposes using the Wall Street bailout money to help them.

What do you guys think? Should the Federal Government bailout these companies? Does the financial crisis have more importance than this? Are American automakers behind foreign automakers?