Automakers could seek more funding

General Motors Corp. has talked with federal officials since the news of its negotiations with Chrysler LLC emerged, although it's not clear what role, if any, the government might be asked to play in a possible deal.

The talks between GM and Chrysler come as the industry prepares to lobby for an additional $25 billion in direct government loans, just a few weeks after Congress approved the first $25 billion to help build fuel-efficient vehicles. With the economy worsening and auto sales slumping, some in the industry hope to loosen the rules around the loans so they can be used to not just retool plants, but help the companies survive.

"We are certainly going to be making the case that the industry needs additional assistance," said UAW Legislative Director Alan Reuther.

Sources have told the Free Press that talks between GM and Chrysler are continuing, even as interest from Renault-Nissan in a possible tie-up with Chrysler has appeared in recent days. Although a deal with Chrysler could compound many of GM's problems, it also would give the automaker access to billons of dollars in Chrysler's cash it may desperately need, given its own cash burn and inability to access credit markets.

Observers said if a GM-Chrysler pact requires government help, the automakers likely would hash out the outlines of a deal first, then apply for aid. But the number of job cuts such a deal would spawn — easily in the tens of thousands, mostly in Michigan — will make any government role a political minefield. Detroit Free Press