Nov. 13 (Bloomberg) -- Chrysler LLC, the company with the biggest U.S. sales slide among major automakers, is in crisis and needs federal aid, Chief Executive Officer Robert Nardelli said.

``It would be very difficult to make it through this unprecedented downturn'' without help, he said today at Ernst & Young's Strategic Growth conference in Palm Desert, California. The automaker ``cannot assume we are going to get financial assistance'' and may have to close two more assembly plants, Nardelli said.

Chrysler, General Motors Corp. and Ford Motor Co. have asked for $25 billion in U.S. aid to help weather the deepest auto-sales decline in 17 years. Sales this year through October tumbled 26 percent for Auburn Hill, Michigan-based Chrysler, compared with 15 percent for the industry.

House Speaker Nancy Pelosi is urging Congress to pass an industry bailout to prevent a collapse of GM, Ford and Chrysler. House Financial Services Committee Chairman Barney Frank proposed taking $25 billion for loans to the companies from the $700 billion in financial-rescue funding.

How much Chrysler might get in federal aid is ``yet to be determined,'' said Nardelli, 60.

Chrysler, owned by buyout firm Cerberus Capital Management LP, has indicated it lost at least $1.08 billion through this year's first six months. The automaker is expected to use up $2.5 billion in cash this year, people familiar with its finances have said. Closely held Chrysler isn't required to report financial results.

Burning Cash

GM said on Nov. 7 that it may run short of cash by the end of this year unless the auto market improves or it raises more capital. Ford said the same day that it went through $7.7 billion in cash in the third quarter. Chrysler hasn't said how much funding it has available.

Chrysler has announced the elimination of 35,000 jobs since February 2007, including plans to trim as many as 5,000 salaried positions by the end of this year. The company also has said it cut product-development spending on all but the most important vehicle projects.

Nardelli on Nov. 7 said Chrysler will carry on with efforts to team up with other automakers, after GM said it had suspended merger talks with an unnamed company. People familiar with the discussions have said GM was talking with Cerberus about combining with or buying Chrysler.

President-elect Barack Obama is pushing Congress this year to approve as much as $50 billion to help U.S. automakers and appoint a person or board to oversee the companies, a move that would require President George W. Bush's support, people familiar with the matter have said.

Obama's economic advisers are convinced that if GM doesn't get financial aid soon, it will have to file for bankruptcy by the end of January.

``This is not about losing a company,'' Nardelli said. ``This is about potentially losing an industry. Because of the interdependence of the supplier network, the railroads, truckers, the impact goes much further.''

He estimated that the livelihoods of ``about 1 million people'' depend on Chrysler staying in business.

To contact the reporters on this story: Alan Ohnsman in Palm Desert at aohnsman@bloomberg.net; Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net

Last Updated: November 13, 2008 18:46 EST