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TORONTO (Reuters) - The Canadian units of General Motors Corp and Chrysler are seeking as much as C$8 billion ($6.4 billion) in aid from the Canadian and Ontario governments as they fight to survive an industry-wide crisis, officials said on Friday.
The request represents a doubling of the aid that the companies said they need. The governments had pledged C$4 billion in support at the end of last year.
GM's plan, outlined on its website, would require the company close no more Canadian plants at this time, but did not provide specific details on any further planned job cuts.
But the plan said GM Canada's workforce would shrink to 7,000 by 2010 from 20,000 in 2005 as a result of plant closures that have already been announced.
GM also called for "changes sufficient to achieve legacy cost reductions and align active worker wages and benefits to benchmark levels."
It proposed a 10 percent cut in executive salaries, and reduced pay and benefits for salaried employees.
Significantly, the plan would also keep 17 to 20 percent of GM's production in Canada over the next five years, the company said, a feature the Canadian government signaled was essential.
GM Canada refrained from providing a dollar amount on its proposal, but Federal Industry Minister Tony Clement said GM is asking for C$6 billion ($4.8 billion) to C$7 billion in repayable loans.
"This is not a grant, this is not an indication that the money goes and never comes back," Clement told reporters.
The minister said the money would not be used to address issues affecting GM's pension plans, which are underfunded and seen as one of the biggest threats to the company's viability.
To be implemented, GM Canada's plan would require agreements by the end of March from the federal and Ontario governments, as well as the Canadian Auto Workers union.
Ken Lewenza, president of the CAW, which represents 33,000 autoworkers, said he was happy that the restructuring plans from the two companies did not contain any new bad news for union members.
However, he said the pensions of its members must be protected in any restructuring of the Canadian operations of General Motors and Chrysler.
Chrysler Canada also a submitted a restructuring plan to the governments on Friday, but the specifics were not immediately available.
Clement said Chrysler is asking for a short-term loan of about C$1 billion, and that the governments needed more "Canadian-specific" details from the automaker.
GM Canada also said its plan would allow it to produce five new vehicles at plants in Oshawa and Ingersoll, Ontario, including hybrid cars.
The companies are reeling from the brutal downturn in the highly integrated North American auto sector and are seeking repayable loans to help them survive.
"This is an existential moment for the Canadian and indeed the North American car industry and it needs everybody to come to the table," Clement said.
Though no large-scale layoffs were proposed by GM Canada and Chrysler on Friday, the minister said during a press conference that there would be job cuts in the short term.
"It's unfortunate, we wish it weren't the case, but it is the case.," he said.
GM and Chrysler have already received a combined $17.4 billion from the U.S. Treasury, and on Tuesday they asked for nearly $22 billion more in emergency funding. That amount could increase to about $30 billion if the auto market further deteriorates. Ford Motor Co says it is in better shape and will not likely need to ask for immediate assistance.
The U.S. market has been hit especially hard, with auto sales dropping to a 27-year low in January. Around nine out of every 10 cars built in Canada are sold in the United States.
The Canadian market had looked more resilient up until November, but sales declines have since been sharp.
An Obama administration task force on the struggling U.S. auto industry on Friday ordered additional analysis and initial restructuring recommendations to be presented at its next cabinet-level meeting, the U.S. Treasury said on Friday.
Led by Treasury Secretary Timothy Geithner and White House Economic Adviser Larry Summers, the panel's initial meeting reviewed recently submitted restructuring plans from Chrysler and General Motors.
Additional reporting by Jeff Hodgson, Scott Haggett; editing by Frank McGurty and Rob Wilson