Dec. 18 (Bloomberg) --General Motors Corp., Ford Motor Co. and Chrysler LLC will shutter about 59 factories over the next month as they struggle to adapt to the worst sales in 26 years and wait on a rescue the White House said is still under study.

The closings show how far automakers are going to conserve cash and prune output under the pressures of a shrinking U.S. market, dwindling access to credit for dealers and demands for advance payments by some GM and Chrysler parts suppliers.

“No one is immune,” said Ed Kim, director of industry analysis for consulting firm AutoPacific Inc. in Tustin, California. The industry is “imploding to a degree I’ve never imagined could happen, and at a speed I’d never expected.”

GM, the biggest U.S. automaker, and No. 3 Chrysler are counting on President George W. Bush to approve emergency loans to help them stave off a collapse that would threaten millions of jobs. Without $14 billion in federal aid, the manufacturers will be out of money by early 2009, they say.

Bush said today he was “worried about a disorderly bankruptcy and what it would do to the psychology of the markets.”

While bankruptcy court would be best under “normal circumstances” for automaker restructuring, “these aren’t normal circumstances,” Bush said during a forum at the American Enterprise Institute, a policy research organization in Washington.

“I haven’t made up my mind” on a plan, he said.

White House spokeswoman Dana Perino said earlier there would be no announcement today on an industry rescue.

Closing Plants

GM, Ford and Chrysler began another round of pullbacks yesterday, burdened by U.S. sales declines this year of 22 percent, 19 percent and 28 percent, respectively, compared with the 16 percent industrywide average.

Chrysler will shut all 30 of its plants for at least a month starting Dec. 19, and Ford plans to idle nine of 15 North American assembly plants in the first week of January.

Ford said its move was part of a previously announced plan to reduce first-quarter North American production by 38 percent. The second-biggest U.S. automaker acted after Detroit-based GM’s Dec. 12 decision to cut 250,000 units of production from its first-quarter North American plans, affecting 20 plants. That was equal to almost 30 percent of GM’s 2008 first-quarter sales.

GM said yesterday that a new $370 million factory making engines for the Chevrolet Volt electric car is being delayed to conserve cash.

‘Bad Times’

“You need to have a hoard of cash built up from the good times to get you through the bad times,” said Dennis Virag, president of Automotive Consulting Group in Ann Arbor, Michigan. “The bad times are here, the bad sales are here and GM and Chrysler just don’t have the cash.”

GM, which reported having $16.2 billion as of Sept. 30, needs at least $11 billion to pay monthly bills. Chrysler ended last quarter with $6.1 billion and needs at least $3 billion to operate, Chief Executive Officer Robert Nardelli told Congress on Nov. 18. Ford has said it doesn’t need emergency aid.

The Wall Street Journal said yesterday that Chrysler owner Cerberus Capital Management LP reopened talks on a GM merger. Spokesman Tony Cervone said the company isn’t in negotiations and hadn’t altered its Nov. 7 position to end discussions on a “strategic acquisition” while it seeks government loans. Chrysler spokeswoman Shawn Morgan also said the company wasn’t in merger talks.

GM fell 71 cents, or 16 percent, to $3.66 at 4:01 p.m. in New York Stock Exchange composite trading after Dow Jones Newswires reported that lender GMAC LLC’s Residential Capital mortgage unit may be considering filing for bankruptcy.

Ford slid 30 cents, or 9.6 percent, to $2.84. GM’s 85 percent plunge this year is the most among the 30 stocks in the Dow Jones Industrial Average. Dearborn, Michigan-based Ford is down 58 percent.

Lending Shutoff

Chrysler Financial, the automaker’s credit arm, said it may temporarily halt the loans used by dealers to buy vehicles as the retailers drain $60 million a day from the account that helps finance their borrowing.

GM is awaiting the results of GMAC’s bid to convert to a bank through a debt swap in order to tap the Troubled Asset Relief Program, the bank-bailout fund that Bush may now use for the automakers. Detroit-based GMAC provides financing for about 75 percent of GM’s inventory.

GM and Auburn Hills, Michigan-based Chrysler both have been pressed by a small number of suppliers for cash payments for parts on concern that the automakers might file for bankruptcy, people familiar with the matter said last week.

The Pontiac division at GM may be pared to a single model from six following a drop in sales every year since 1999, Mark LaNeve, North American sales chief, said in an interview.

Toyota, Honda, Nissan

North American output for Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co., Japan’s three biggest automakers, is being reduced, too, down more than 300,000 units from a year earlier. All three have announced cuts to scheduled production.

Toyota stopped assembly work at its San Antonio pickup truck plant for 15 weeks this year because of rising inventory and this week, it indefinitely halted construction of a Mississippi plant that was to produce Prius hybrids by 2010.

“When you’ve got the economy in the situation that it is now, it’s not just the Big 3’s customers that are affected,” said AutoPacific’s Kim. “It’s everyone’s customers. It is all interconnected.”

To contact the reporters on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net; Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: December 18, 2008 16:14 EST