US Treasury's chief auto adviser says GM and Chrysler may be too optimistic about their future sales.
The US Treasury, under the new Obama administration, is getting wise.
Steve Rattner, the Treasury Department's chief auto adviser, said in an interview with Bloomberg Television that GM and Chrysler may need a lot more money than they are currently asking for.
GM says it needs an additional 16.6 billion US dollars in government bailout loans, on top of the 13.4 billion it has already received. Maybe they're suffering from a little OCD and 30 billion makes a nice round figure. Chrysler is asking for 5 billion in addition to the 4 billion they have received from the US Treasury.
But Rattner says that the grand total "could be considerably higher" than that 21.6 billion that the two troubled Detroit automakers are currently waiting on. He believes it all depends on auto sales, which have plummeted and show no signs of bouncing back.
"What they've asked for depends on them achieving plans that are somewhat ambitious...like all management teams, they tend to take a reasonably -- slightly perhaps -- optimistic view of their business," Rattner said in the interview according to a Bloomberg transcript.
Rattner is also not very optimistic about Chrysler's chances of becoming a viable business on its own. "If you read their numbers, ... they are ... just kind of barely making it. You know, they just kind of inch along," he said. Rattner believes Chrysler's proposed alliance with Fiat is a "worthy idea to consider."
But GM and Chrysler need not worry about the trough going dry just yet. Rattner hinted that the Obama administration may seek more money for automakers from the Congress. What choice do they have?