9 Bailout Surprises From GM and Chrysle

9 Bailout Surprises From GM and Chrysle

Back in December, economist Mark Zandi of Moody’s Economy.com told Congress that bailing out the Detroit automakers could ultimately cost $75 billion to $125 billion. So when GM and Chrysler asked for a mere $17.4 billion late last year, it seemed like a bargain.

Then GM got another billion or so as part of a bailout for its car-financing arm, GMAC. And now, GM and Chrysler have asked for almost $30 billion more from a variety of programs, pushing the total for just these two companies close to $50 billion. That doesn’t include Ford, which many analysts think will end up asking for nearly as much federal aid as GM.

[See why Ford is veering closer to a bailout.]

Surprised? Get used to it: Deepening gloom has become a recurring theme of Bailout Mania, as troubled firms dribble out their bad news in droplets and everything turns out worse than expected. Here are some of the major surprises contained in the “viability plans” submitted to the government by GM andChrysler:

Both need way more money than previously acknowledged. In its 117-page viability plan, GM says it expects to burn an astounding $18 billion in cash in 2009, one reason it may need a total of $30 billion from the government by 2011. Chrysler says it will have to declare bankruptcy by March 31 if it doesn’t get an extra $11 billion in government aid, for a total of more than $15 billion. At this point, it seems prudent to assume that they’ll need billions more after that.