DETROIT -- In submitting a viability plan to the U.S. federal government Tuesday, Chrysler asked for an additional $2 billion beyond the $7 billion in loans it sought late last year and outlined further steps to cut costs.
Chrysler said it will reduce fixed costs by an additional $700 million, cut 100,000 more units of production capacity, discontinue three more model lines and sell $300 million more in assets.
"Since Chrysler LLC's original $7 billion submission, there has been an unprecedented decline in the automotive sector," the company said in a statement. "Based on this, we will require incremental financial support to continue our orderly and effective restructuring."
The Bush administration gave Chrysler only $4 billion of the $7 billion in loans it sought.
The automaker promised to complete its viability plan by the March 31 deadline.
Chrysler says it could survive on its own but would be "enhanced through a strategic alliance." That alliance, with Italian automaker Fiat , would give Chrysler access to a supply of fuel-efficient small cars
Chrysler suffered a precipitous loss of sales and revenue in 2008. The company's 30 percent sales loss was the steepest among major carmakers in the United States last year.
Chrysler claims its restructuring plan, launched in February 2007, was on track until June 2008. That's when fuel prices soared to $4 a gallon and the credit crisis was gathering momentum. The credit meltdown forced Chrysler's captive finance company, Chrysler Financial, to exit the leasing business in August 2008, costing the carmaker 20 percent of its sales volume almost overnight.
Since launching its recovery plan, Chrysler has eliminated 1.2 million units of capacity and stopped building four unprofitable models. In the process, Chrysler has slashed its work force by 32,000 and cut fixed costs by $3 billion. Chrysler says it has identified more than $1 billion in unproductive assets and already sold $700 million worth.
Chrysler is relying on alliances with other carmakers to rebuild itself.
Chief among those partnerships is a proposed alliance with Fiat, announced in January. Under terms of the deal, Fiat would supply Chrysler with a range of small cars and sub-2.0-liter engines that will help Chrysler meet U.S. fuel economy requirements. Fiat gets access to the U.S. car market for its products, including the Fiat 500 small car, while Chrysler gets access to Fiat's international markets.
The alliance is contingent on U.S. Department of Treasury approval of the $7 billion loan Chrysler originally requested. Chrysler says Fiat will not receive any U.S. taxpayer dollars.