Dec. 1 (Bloomberg) -- General Motors Corp., Ford Motor Co. and Chrysler LLC may need $40 billion to carry them through the current sales slowdown, almost two-thirds more than they’re seeking in U.S. aid, said Jerome York, a former GM board member.

“I don’t think it is close,” York, an adviser to billionaire Kirk Kerkorian, said of the $25 billion in low- interest loans the companies said they must have to avoid an industry collapse. The automakers’ lending arms may need an additional $100 billion in federal support, he said in an interview on Bloomberg Television today.

GM, Ford, and Chrysler are presenting plans to Congress tomorrow in search of assistance to help survive as U.S. industrywide sales head for their lowest level in 17 years.

The lending units “can’t get the funding they need to fund all consumers that are coming into the showroom that are credit- worthy,” he said in the interview. “If you put money into these auto finance companies, they’re going to lend.”

Congress should “consider the finance companies as kind of being in the general area of the banking industry, as opposed to the car companies that are industrial,” said York, who is also chief executive officer of Harwinton Capital LLC.

No Bonuses

GM CEO Rick Wagoner, Ford CEO Alan Mulally and Chrysler CEO Robert Nardelli shouldn’t be granted bonuses and may need to accept salary cuts “until the loan monies are paid off,” said York. “In the spirit of a quality of sacrifice, that cash compensation does need to come down.”

The three companies may need to scale operations down for combined market share of about 32 percent to help lower costs, said York. They held about 48 percent of the market this year through October, according to Autodata Corp. in Woodcliff Lake, New Jersey.

“They’ve basically been forcing market share and the price they pay is high incentives and lower residual values than the Asian competitors,” he said.

The U.S. automakers have lost a combined 21 percent in sales this year in their home market, according to Autodata. That compares with a 15 percent plunge industrywide.

Congress will probably be able to convince the United Auto Workers to take more job cuts as part of the conditions on the loan package, he said. Additionally, many U.S. auto dealers “would be receptive to buyouts” in order to close.

“There’s no painless way to secure a bright future for these companies,” York said.

To contact the reporters on this story: Greg Bensinger in New York at gbensinger1@bloomberg.net; Greg Miles in New York at gmiles1@bloomberg.net

Last Updated: December 1, 2008 18:25 EST