GM Warns It Could Need Twice as Much Taxpayer Money

(MoneyWatch)  U.S. auto sales will hit bottom this quarter, according to the five-year plan GM submitted this week to the U.S. Treasury.

That's the good news, such as it is. The bad news is that GM says it could need more than double the amount of government loans for which it received approval in December.

GM's forecast shows U.S. auto sales in the first quarter of 2009 bottoming out at a seasonally adjusted annual sales rate of only 9.8 million, down from 15.6 million in the year-ago quarter. The trough is followed by a slow but steady recovery. GM's forecast includes medium and heavy trucks, like 18-wheel trailer trucks. The more commonly reported light-vehicle SAAR would be about 9.3 million at the bottom, down from 15.3 million in the year-ago quarter.

Safe to say, it's GM's fervent wish that U.S. auto sales don't get any worse, even if there are few signs that sales are getting any better.

As it is, GM earlier this week increased its request for U.S. government loans, from a previous total of $13.4 billion, to $22.5 billion. GM also warned it could need as much as $30 billion, if its most pessimistic projections come true.

GM must have realized that hiking its request for funds would be a bitter pill, politically. In a news release announcing the new plan, it takes GM a long time to get to the point where it says it is asking for more money -- close to 2,300 words about GM's ongoing restructuring, and about how terrible the business environment is. Chrysler this week also upped its request for government loans, but it brought out that point right away.

Even if GM's sales forecast turns out to be accurate, GM expects a very slow recovery: about 10.2 million light vehicles in 2009; 12.2 million in 2010; 14 million in 2011; 15.7 million in 2012. U.S. auto sales in 2008 were 13.2 million, down from 16.1 million in 2007, according to AutoData Corp. That means GM expects it will take more than five years to regain the sales level of 2007.