General Motors Corp
However, it remains unclear whether the development will result in a scaled-back overall request for assistance on top of the $13.4 billion bailout approved in December.
A lot depends on how the market and the economy goes. We've run a little ahead on some of the cost reduction stuff, which is good, but at this point the market is still tough, GM Chief Executive Rick Wagoner said on the sidelines of a business conference in Washington. We haven't updated it.
An Obama administration task force headed by Treasury Secretary Timothy Geithner and White House economic adviser Larry Summers is considering GM's request for more than $16 billion in additional help and a separate request for up to $5 billion from Chrysler.
Chrysler received $4 billion in the same bailout package that was extended to GM last year.
The task force has until the end of March for its deliberations as GM works to secure new concessions from its bondholders and the United Auto Workers union to cut its debt by a combined $28 billion.
Shares of GM jumped after the announcement and closed up 17 percent to $2.18 in New York trade.
Despite GM's decision on Thursday, the White House is still taking a deliberate approach for dealing with the distressed auto industry.
In terms of what GM has announced today, I don't know whether that makes the current job that much easier, said White House spokesman Robert Gibbs of task force decision-making.
We still, as the president has said, have to come up with a long-term solution that retools and re-imagines the auto industry so it is sustainable. That's the goal of the task force and I think they are working toward that quickly.
Gibbs said Obama has been briefed on progress of the task force.
The White House also said the task force is focusing on struggling suppliers, who serve U.S. and overseas manufacturers and have also sought billions in government assistance to stay in business.
Wagoner also expressed concerns about that sector on Thursday.
I think the state of the supply base is difficult. We're watching it closely and we're trying to work with them and we need to do that, Wagoner said.
On Wednesday, the top U.S. executive of Toyota Motor Corp <7203.T> told reporters that the company is concerned with the health of about 100 suppliers but is worried about 20 to 30 within that group. Jim Lentz said Toyota is working on contingencies to offset any possible supply disruption.
GM burned through $5 billion in the fourth quarter and ended the year reliant on the first $4 billion in loans it received from the Treasury.
Under the restructuring plan submitted to the government in mid-February, GM had forecast that it would burn through another $5.1 billion in January and February.
It was not immediately clear how the cost-cutting efforts GM made in the first months of the quarter had affected its projected cash burn rate.
One area of cost concern for GM and other domestic automakers is healthcare, which was discussed at a White House forum held in Dearborn, Michigan, on Thursday.
GM is one of the largest private payers in healthcare in the country covering a million individuals and we have struggled with our health care costs, Shelly Hoffmann, Director of Health Care Plans at GM said.
Cars produced in Canada cost $1,000 less than cars produced in the United States simply because of healthcare costs. We've got to turn that around, said Melody Barnes, director of the White House Domestic Policy Council.
(Reporting by Kevin Krolicki in Detroit, John Crawley and Matt Spetalnick in Washington and Michael Strong in Dearborn, Michigan; editing by Carol Bishopric)