In Washington, Automakers Plead for Aid

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By BILL VLASIC and MATTHEW L. WALD

Executives of Detroit’s Big Three automakers traveled to Washington on Thursday to press their case for more financial aid from the federal government because of the bleak prospects for their industry.

And those prospects are likely to dim further on Friday, when General Motors and Ford are expected to report deeper job and production cuts, along with huge third-quarter losses. Analysts expect each to report losses of more than $2 billion, excluding special charges or write-downs.

The meeting in Washington, with Capitol Hill’s top Democrats — the House speaker, Nancy Pelosi, and the Senate majority leader, Harry Reid — centered on a request by G.M., the Ford Motor Company and Chrysler for up to $25 billion in loans to help the companies as they burn through their cash cushions during the worst sales market in 15 years.

The loan request is in addition to $25 billion in low-interest loans to be available from the Energy Department to assist automakers in developing more fuel-efficient vehicles.

The meeting, which lasted an hour and a half, was attended by G.M.’s chairman, Rick Wagoner; Ford’s chief executive, Alan R. Mulally; Chrysler’s chairman, Robert L. Nardelli; and the president of the United Automobile Workers, Ron Gettelfinger.

After the meeting, Representative John D. Dingell, Democrat of Michigan, called the discussions “extremely productive” but offered no details on when, or if, an aid package might be forthcoming.

Ms. Pelosi issued a statement saying the group discussed “how to protect hundreds of thousands of workers and retirees, safeguard the interests of American taxpayers, and use cutting-edge technology to transform blue-collar jobs to green-collar jobs for generations to come.”

When a spokesman for Ms. Pelosi, Nadeam Elshami, was asked if Congress would take up a proposal when it returns to Washington on Nov. 17, he said, “I wouldn’t go that far.”

Mr. Reid was also not specific about what aid Congress might provide. The Detroit executives slipped out of meetings with Ms. Pelosi and Mr. Reid, avoiding reporters in both places.

A spokesman for G.M., Greg Martin, said the executives had a “frank and constructive discussion” about Detroit’s “deteriorating liquidity situation.”

“We are committed to working closely with Speaker Pelosi and Senate Majority Leader Reid to ensure immediate and necessary funding to keep the auto industry viable and its transformation on track during this critical time,” Mr. Martin said.

The expected third-quarter losses from G.M. and Ford, the two largest American automakers, will come on top of dismal financial results for the first six months of the year, during which G.M. lost $18.8 billion and Ford lost $8.6 billion. The companies will also reveal how quickly they are burning through their available cash.

“I have never seen anything like this,” said David Healy, who recently retired after 40 years as an auto analyst, most recently with Burnham Securities. “But if they can get the federal money, I think there’s a decent chance they can survive.”

Both G.M. and Ford are expected to announce measures on Friday to conserve their rapidly dwindling cash reserves.

G.M. is likely to announce another round of cuts for white-collar jobs, as well as temporary layoffs at factories, early holiday shutdown of facilities and delays in developing new vehicles.

Ford is expected to take some plants offline to reduce production of slow-selling models, and possibly seek more buyouts from employees.

Both companies, along with Chrysler, have been furiously downsizing to compensate for a steady erosion of their combined United States market share. Together, Detroit’s Big Three have cut more than 100,000 jobs and closed dozens of factories since 2006.

But the cost cuts and turnaround plans have not been enough to keep pace with the drastic downturn in sales of new cars and trucks this year.

United States vehicle sales have fallen by 14.6 percent this year through October and are expected to remain slow well into next year.

The downturn began in spring with rising gas prices but has become progressively worse because of a weak economy, the tightening of credit for prospective buyers and sinking consumer confidence.

In October, industry sales dropped 31.9 percent from the period a year earlier. G.M. sales fell 45.1 percent in the month, while Ford dropped by 30.2 percent and Chrysler by 34.9 percent.

Of the three Detroit companies, G.M. appears to be in the most perilous condition. G.M. had been burning through an estimated $1 billion a month this year, and analysts say that figure probably increased significantly in the third quarter.

As a result, the company could run out of the necessary cash to pay its bills and finance operations by next year.

In making his pleas for government aid, Mr. Wagoner of G.M. has outlined in detail how the failure of Detroit’s auto companies would have a ripple effect on the economy that could cost hundreds of thousands, perhaps even millions, of jobs in the United States.

“The negative effects of such a corporate collapse on an already weakened economy could wreak additional havoc on individuals and businesses across the country,” said Louis E. Lataif, a business professor at Boston University and a former Ford executive.