By Sharon Terlep Of DOW JONES NEWSWIRES DETROIT -(Dow Jones)- The declining market share of the Detroit auto makers is proving another hurdle in the companies' attempts to secure a federal bailout.
In making the case that a $34 billion lifeline from the federal government will sustain the auto makers through a recession, the companies predict they won't lose much more ground to foreign-based rivals in the U.S.
That assumption was met with heavy skepticism on Thursday by lawmakers, who pointed to decades of declining share as General Motors Corp. (GM), Ford Motor Co. (F) and Chrysler LLC lose legions of customers to Toyota Motors Corp. (TM) and other rivals.
Detroit auto makers' grip on U.S. market share has slipped to less than half from close to 70% in 1990. This year alone, the domestic auto makers' share of sales fell nearly four percentage points. In today's sales environment, a point of market share amounts to about 7,500 auto sales, or more cars and trucks than some plants build in a month.
"No thinking person thinks all three companies could survive," said Sen. Bob Corker, R-Tenn., said in some the more blunt commentary during the first of two days of hearings on Capitol Hill.
GM, Ford and Chrysler this week delivered plans to Congress that attempt to prove the companies will survive if they are granted access to $34 billion in low-interest federal loans.
GM is seeking an immediate $4 billion injection, along with $8 billion in term loans and access to a $6 billion line of credit. Ford is asking for a $9 billion credit line, which it wouldn't tap unless business conditions worsen. Chrysler is requesting a $7 billion bridge loan by the end of the month.
As part of the plans, the companies laid out worse-case scenarios that include U.S. auto sales, which have hit multidecade lows in recent years, remaining severely depressed through 2012. GM's plan, for instance, includes a scenario under which sales would grow little or not at all for the next several years.
GM Chief Executive Officer Rick Wagoner said Thursday the company also factored in a modest decrease in market share as a result of plans to eliminate brands and nameplates but didn't specify how much sales could dip before the plan becomes imperiled.
Chrysler Chief Executive Officer Robert Nardelli said Chrysler, which earlier this week announced that its U.S. sales fell 47% in November, expects a constant share of around 10%.
Shares of GM and Ford fell sharply lower Thursday amid uncertainty about whether the government will come to the rescue of the auto makers. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, said after Thursday's hearing that there is consensus that inaction isn't an option, but he stressed that the auto makers won't get any amount of money without significant conditions attached.
GM shares closed 16% lower at $4.11, while Ford shares dropped 6.7% to $2.66. Chrysler, owned by investment group Cerberus Capital Management, doesn't have publicly traded shares.
-By Sharon Terlep, Dow Jones Newswires; 248-204-5532; sharon.terlep@dowjones.com.
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(END) Dow Jones Newswires
December 04, 2008 17:33 ET (22:33 GMT)

Publié le 04 Décembre 2008 Copyright © 2008 Dowjones