“GM’s future now seems assured,” said Rep. Sander Levin, D-Royal Oak. “But it’s coming at a real price for families and communities.”

Michigan is likely to be among the hardest hit, given the company’s concentration in the state. Sen. Carl Levin, D-Detroit, was given the list of affected plants in Michigan late Sunday night, his office confirmed. But officials were waiting to announce the list until workers could be informed Monday morning.

Lawmakers elsewhere are worried as well. Sen. Lamar Alexander, R-Tenn., said he was “doing everything I can” to save the Spring Hill, Tenn., plant that is home to GM’s Saturn unit. Sen. Tom Carper, D-Del., warned that closing the assembly plant in his state would further reduce the company’s already shrinking political clout outside the industrial Midwest.

“It’s a very sad day obviously for Michigan and for the country,” said Rep. Thad McCotter, R-Livonia.

McCotter criticized the Obama administration’s auto task force for pledging early in its existence to try to keep both companies out of bankruptcy court.

“What we ended up with was prepackaged bankruptcy for both GM and Chrysler,” he said. “To hold out hope (that bankruptcy could be avoided), what they should have done was just told us that’s what it was.”

Despite the worry, Michigan lawmakers said the news could have been worse. With an additional $30 billion in federal aid, the company will emerge from bankruptcy better able to compete, and negotiations with the United Auto Workers union lessened the impact of production cuts in the United States, they said.

Sen. Levin pointed to a GM pledge to increase the share of its total auto production located in the United States to 70 percent, and the promise to build a new, small car at one of three assembly plants the company will idle.

“That’s a major change” from the company’s original plans, he said.

“There was some major discussions” on that issue, Rep. Levin said. “I think they made some necessary changes.”

Both Levins said they will keep watch Monday on U.S. bankruptcy court in New York for a decision to approve Chrysler’s plan to emerge from bankruptcy — both for what’s at stake for Chrysler and what it means for GM.

“That story coming the same day (as GM’s filing) would really reinforce the point that it’s not an end, it’s a beginning,” Sen. Levin said.

None of the lawmakers would confirm that GM will decide to leave its headquarters in Detroit, but Sen. Levin, who opposed a possible move to Warren, said he “can confidently predict good news on that.” McCotter said he was all but certain GM would remain at the Renaissance Center.

“It would have been a cruel irony for GM to go into bankruptcy and on the same day leave the RenCen, which is a symbol of rebirth for Detroit,” McCotter said.

GM did not confirm the news or comment on who might succeed Wagoner, 56, a GM lifer who became the company’s chief executive in 2000 and chairman in 2003.

But Obama told four Michigan members of Congress on a conference call Sunday that GM President and Chief Operating Officer Frederick Henderson would run the company for the time being, according to a source familiar with the situation. Henderson has been carrying out the company’s restructuring on a day-to-day basis and knows the task force leaders.

Industry experts credit Wagoner with pushing through profound reforms at the 100-year-old automaker, but his critics say Wagoner moved too slowly.

After losing $82 billion since 2004, GM is now subsisting on federal loans as it struggles to survive one of the most perilous stretches in its history.

The company has received $13.4 billion from the government and is seeking up to $16.6 billion more. According to a source familiar with the matter, Obama will provide GM with an unspecified amount of working capital over the next 60 days.

An Obama administration official said Sunday that the White House asked Wagoner to resign and he had agreed.

Most industry insiders were not entirely surprised, given the political mood.

“From the government’s perspective, they had to show a visible form of sacrifice,” said David Cole, chairman of the Center for Automotive Research in Ann Arbor and the son of a former GM president.

Obama said earlier on Sunday he believed Detroit’s automakers could become competitive. “We think we can have a successful U.S. auto industry,” he said on CBS’s news show “Face the Nation.”

“But it’s got to be one that’s realistically designed to weather this storm and to emerge at the other end much more lean and mean and competitive than it currently is. And that’s going to mean a set of sacrifices from all parties —- management, labor, shareholders, creditors, suppliers, dealers,” Obama said.

He acknowledged that the automakers had taken measures to address “longstanding problems in the auto industry and the current crisis, which has seen the market for new cars drop from 14 million to 9 million.”

“Everybody’s having problems, even Toyota and other very profitable companies,” he said.

According to a source familiar with the situation, Obama told the Michigan lawmakers that no management changes were forthcoming at Chrysler. Chairman and Chief Executive Robert Nardelli has been in the job less than two years.

The administration also will provide working capital for Chrysler over the next 30 days as it moves to conclude an alliance with Italy’s Fiat SpA, a person familiar with the call to lawmakers said.

General Motors has announced that they need help and will need help in the future to stay afloat. This comes amidst wide speculation that GM’s stock might be worth $1 sometime soon. The stock value of GM is the lowest it’s been in a long time. The company is being constantly downgraded by analysts, which makes it’s comeback even more unlikely.

We can only hope that the federal government can provide enough money for the auto giants to stay afloat, as according to CNN for every 1 person working for one the Big Three, 9 others work for them at the second tier supplier level. With the destruction of the auto industry, one can only imagine where the countries economy might be headed.

The CEO’s of Chrysler, GM and Ford held meeting on Capitol Hill on Wednesday in hopes of securing the loans prior to the end of the government’s fiscal year.

D-Calif. Nancy Pelosi House Speaker was present at the meetings amongst other high ranking political figures.

Chrysler CEO Bob Nardelli and Ford CEO Alan Mulally were both responding to reporters in a very positive fashion about the proceedings. General Motors CEO Rick Wagoner on the otherhand had no comment.

The $25 billion loan that is in question is to be used exclusively for re-tooling of plants for more fuel efficient vehicles. In order for the loans to be used, the newly designed production vehicles have to be 25% or more fuel efficient then of those currently in the same class.

All 3 automakers plan to use the funds in order to retrofit their plants from truck to small and medium sized car production. The apparent problem is that none of the manufacturers are hopeful that they will meet the criteria to be 25% more efficient in terms of fuel mileage.

Timing is also very important to complete this deal, as the new fiscal year of the U.S. government begins on Oct. 1st.

In terms of timing both Congress and the White House have to sign off on the deal prior to the loans being available to the companies. So far the White House has dodged questions in the matter deferring the responsibility to Congress.

One must wonder, should the government not provide the $25 billion in funding, will the Big Three have trouble staying afloat, and if not will the Fed throw them a life-jacket?

Director Peter Orszag posted his new estimate on the Budget Office’s Web site on Friday, Sept. 12. Congress relies on the Congressional Budget Office to help it make taxing and spending decisions.

The previous budget estimate was $3.75 billion as to the cost of the loans to taxpayers. Due to the further worsening of the credit markets, as well as several other downgrades by the rating agencies of the automakers credit, borrowing costs are expected to be higher.
This places the $25 billion in proposed loans in question, as the cost of the loans to taxpayers is estimated to be $7.5 billion, which is twice the originally stated amount.

As the Democratic and Republicans gathered for their party meetings, the party buses were not bringing cheerleaders, but VIP’s and lobbyists from the automakers. North American automakers that is. Automakers that are struggling to retain market share, profitability and sales.

Sales are down 20% across the board between the Big Three for the past quarter, which in fact should be called the Declining Three, with sales numbers outpaced by Asian brands.

It is no easy task to maintain a company with unionized workers, retired workers and soaring supply costs. Transportation costs are up, so are health benefits and overhead utility expenses. All of the forementioned would not be a problem if sales would pick up.

Detroit is asking the feds for $50 billion in low interest loans to re-vamp the product assortment and meet fuel efficiency standards set out by CAFE. Asian competitors do not have to worry about such problems, as their balance sheets seems healthy, which guarantees them low interest loans from common lenders such as banks. The Big Three on the other hand does not have the luxury of having a clean balance sheet, therefore will need government backed loans in order to keep interest costs under control.

Thankfully, both Obama and McCain need votes in Michigan and Ohio, therefore both parties are behind the proposal to fund the automakers.

All eyes are on Congress to see if they can raise the required $50 billion.