Bankruptcy Likely for Two U.S. Automakers

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Bankruptcy is now a likely reality for two of America's big three automakers.

The federal government is reportedly pushing Chrysler to prepare the paper work while General Motors prepares to temporarily shut down more than a dozen plants.

The Treasury Department did say Friday that it would lend another $2 billion to GM next week to provide working capital.  The loan pushes the automaker's total government aid to about $15.4 billion.

Click the player to watch the report from CBN News Washington Correspondent Jennifer Wishon followed by Gordon Robertson's comments concerning major unemployment issues which may come from the automakers bankruptcies.

Still, it's the end of the line for General Motor's oldest plant. The last SUV rolled off of the Janesville assembly line in Madison, Wisconsin Thursday, a symbol of something many Americans never dreamed could happen and now is almost certain.

CNN reported Friday that GM will end their "Excitement division" Pontiac car brand. An official announcement is expected Monday.

"We're moving our restructuring deeper and faster in recognition of getting our business to a viable state as quickly as possible," said Troy Clarke, GM North America President.To cut down on the number of unsold GM vehicles crowding car lots, the ailing auto giant plans to cut production nearly in half.

"It's pretty clear that GM had to do something like this, because of the backlog that is building up at dealer showrooms and in inventory," said Karl Brauer, Editor-in Chief of Edmunds.com.

GM Closing Thirteen Assembly Plants This Summer

Thirteen assembly plants from Texas to Michigan will be shut down for most of the summer. Parts suppliers that depend on the company are bracing for the blow and thousands of laid off workers are preparing to walk to the end of already long unemployment lines in states that desperately need good economic news.

"Nine weeks is a long time to be without work you know," said one auto worker.

"Unemployment comes, it take a while," said another worker. "It just puts you farther and farther in the hole."

Some experts say bankruptcy may be GM's only way out of the hole.

"Unfortunately as bad as things look for GM, Chrysler is in even more dire straights," Brauer explained.

No More Government Aid To Chrysler

And the company is running out of time. President Obama says he will cut off government aid to the company April 30.

If Chrysler can't strike a deal with Italian automaker Fiat, it will be forced to file for bankruptcy. Unless the company's lenders are willing to forgive debt in exchange for stock. However, both sides are still far apart.

With jobs already scarce, employees at both companies can do little but hang on for the ride.

"All the sacrifices we've made to date were not enough and we would have to sacrifice more," said an auto worker. " a little disheartening."

"We don't know what's ahead," said another.

For workers at General Motors, it is unplanned time off.

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Jennifer Wishon

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