Chrysler and General Motors announce job losses and need $21bn in aid

Struggling US carmakers, Chrysler and General Motors, have announced major job losses and said they need $21.6 billion (£15.1 billion) between them in order to survive.

The car industry worldwide has suffered as consumers cut back on big ticket items and many other carmakers worldwide have been making major cut backs.

Firstly, General Motors has said it would try to borrow up to $16.6 billion from the US Government - this is in addition to the $13.4 billion it has already received. Furthermore, the carmaker has announced plans to shed a massive 47,000 jobs worldwide and plans to shut five more factories.

At the end of last year, GM announced plans to cut the number of sites from 47 in 2008 to 38 by 2012. However, its announcement yesterday to close another five sites will leave it with 33 facilities.

Secondly, Chrysler is asking for a further $5 billion (£3.5 billion) from the Government - on top of the $4 billion loan it received in December, and is planning to cut 3,000 jobs.

Chrysler and GM, along with Ford, have experienced a sharp fall in sales in their home market but the three major US car firms have also been criticised for not responding quickly enough to providing smaller, more fuel-efficient vehicles amid the economic downturn.

In related news, just last week Peugeot Citroen (which is France‘s largest carmaker) announced it is to slash 11,000 jobs - this is on top of the 3,000 jobs it slashed at the end of 2008.

Meanwhile, Japan has been hit particularly hard by the slump in demand for cars with Nissan announcing it would make 20,000 job cuts worldwide over the next 12 months.

Honda, Japan’s second-largest carmaker has shut down its UK plant in Swindon for four months, while Japanese carmaker Mazda announced it is to axe over 500 more jobs in Japan.

Fellow Japanese carmaker, Toyota, announced full-year losses would be three times higher than originally predicted.

Finally, Mitsubishi said it expected a net loss of 60 billion yen for the 12 months to 31 March, compared with a profit of 34.7 billion yen a year earlier.

Story link: Chrysler and General Motors announce job losses and need $21bn in aid