(CEP News) - Chrysler has reported that it is seeking an additional $2 billion in U.S. government loans, on top of its original $7 billion request, news wires are reporting.

Chrysler cited an “unprecedented decline” in the auto sector since its original request.

The automaker said its restructuring plan is “conservatively based” and reflects an average annual 1.8 million unit reduction each year until 2012.

“This plan will ensure the continued provision of health care and pension benefits to our active employees and retirees, while continuing to protect hundreds of thousands of middle class, quality American jobs at Chrysler, our dealer network and our suppliers,” the automaker said in a press release.

Chrysler also projects U.S. auto sales to sink to a 40-year low of 10.1 million vehicles in 2010.

The company also announced it plans to cut an additional 3,000 jobs as part of its restructuring plan.

“Chrysler’s viability plan is built around a robust product plan, including 24 launches in 48 months and the introduction of electric vehicles to help meet current federal fuel economy standards,” the automaker said in its press release.

Chrysler said that to reduce costs, the UAW, dealers, suppliers and second lien lenders’ concessions have been implemented or fundamentally agreed upon.

“The signed term sheets for the Labor Modifications and VEBA modifications fundamentally comply with the requirements set forth in the U.S. Treasury Loan and once realized would provide Chrysler with a work force cost structure that is competitive with the transplant automotive manufacturers,” Chrysler said in its release.

Chrysler said additional restructuring measures planned for 2009 include:

* Reducing fixed costs by $700 million

* Reducing one shift of manufacturing

* Reducing total manpower by 3,000 people

* Discontinuing three vehicle models

* Taking out 100,000 units of capacity

* Selling $300 million additional non-earning assets

By Stephen Huebl, shuebl@economicnews.ca, edited by Sarah Sussman, ssussman@economicnews.ca

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Posted in Categories: Australia, Auto, Economy, Releases, USA.

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