Chrysler urges bailout but Washington split

By Soyoung Kim

DETROIT (Reuters) - Goldman Sachs suspended its rating on General Motors Corp GM.N on Thursday and said the automaker needs at least $22 billion (14 billion pounds) in federal aid, while Chrysler CBS.UL said it would be "very difficult to survive" without government support.

But U.S. lawmakers remained deeply split over whether to bail out the U.S. auto industry, and U.S. Treasury Secretary Henry Paulson said any federal aid for the U.S. automakers must ensure their long-term viability.

Chrysler LLC Chief Executive Bob Nardelli said Chrysler was losing money due to a decline in U.S. auto sales to 25-year lows, and said Chrysler would seek federal money for its liquidity and restructuring needs.

In one of his few appearances since merger talks between GM and Chrysler broke off, Nardelli said Chrysler must have broader ties with U.S. automakers or alliances with overseas competitors to ride out the industry downturn.

The auto industry has stepped up lobbying efforts to get government support and the heads of the three U.S.-based automakers are expected to testify next week before a congressional committee considering aid for the industry.

The Bush administration said the government could quickly disburse $25 billion in loans already approved by Congress. However, the administration has responded coolly to an aid plan being shaped by Democrats, which includes using part of the $700 billion financial rescue package to provide additional liquidity for the auto industry.

U.S. President-elect Barack Obama is considering appointing someone to lead efforts to help the auto industry return to health, an Obama aide said on Thursday.

The sales slide that began in the United States has spread to the rest of the world because of the credit crisis. On Thursday, data showed that auto sales in Europe fell 15 percent in October from a year ago.