GM cuts output and jets as U.S. demands turnaround plans

By David Bailey and John Crawley

DETROIT/WASHINGTON (Reuters) - Detroit automakers began work on turnaround plans demanded by Congress in return for $25 billion (16 billion pounds) in aid as General Motors Corp said it would cut production more and give up two of its controversial corporate jets.

Pushed to the brink of failure by a plunge in auto sales, GM said on Friday it would shut its truck plant in Oshawa, Ontario, Canada 1-1/2 months early and extend regularly scheduled down time at five North American plants to reduce production and keep inventory down.

GM, the top U.S. automaker based on light vehicle sales, said it would return two of its leased jets after intense criticism this week over GM executives' deluxe arrangements for travelling to Washington to plead for a federal bailout. GM is still leasing three corporate jets.

Congressional leaders agreed on Thursday to give Detroit automakers until next month to make their case for a rescue, but they demanded that GM, Chrysler LLC and Ford Motor Co show they have business plans that can keep them out of bankruptcy.

House Speaker Nancy Pelosi said she and Senate Majority Leader Harry Reid, leaders of the Democratic majority, were sending a letter to the chief executives of the Detroit Three detailing what the high-stakes turnaround plans need to show.

"This isn't to be life support for three months," Pelosi told reporters. "It's about viability for a long time to come."

The companies have said federal aid is the only alternative to bankruptcy and massive job losses.

The letter will demand that automakers provide by December 2 details of their financial positions, short term liquidity needs and explain how they will be viable long term.