The US government said Monday that it didn’t want to run GM or Chrysler, despite the news that the federal government would likely become the majority stockholder of GM through a restructuring plan submitted to the Obama administration by General Motors.

GM could receive $5 billion more in government loans, and Chrysler $500 million, according to a report filed Tuesday by the federal government.

The government’s inspector general in charge of the auto bailout programs filed the report, which gives GM until June 1 to meet government-mandated conditions (Chrysler only has until April 30).

Sources revealed to the Wall Street Journal that representatives of 200,000 salaried white-collar retirees have been asked to meet with the auto task force later this week.

The retirees want to keep their benefits despite the car companies’ massive restructuring plans and possible bankruptcies. Salaried retirees are not covered by union contracts and are therefore more vulnerable during restructuring. The retirees are from GM, Chrysler, Ford and Delphi, the auto parts maker.

“Some people think that we’re the fat cat execs. That’s not true at all.” — said Chuck Austin, president of the National Chrysler Retirement Organization and an engineer who retired after 40 years.

Delphi has been in bankruptcy for three years and has already cut retirees’ health care coverage this year. White collar retirees include those in sales, marketing, administration, and others in middle management.

CNN outlines four ways Detroit can be fixed, all at a high cost. CNN estimates the final price tag for a simple bailout could top out at $130 billion for the federal government. In addition to the $39 billion GM and Chrysler have requested, parts dealers and suppliers have asked for bailouts, and consumers may be lured into buying Detroit’s products with tax credits and other incentives that could cost the government billions more.

Auto parts suppliers want $18.5 billion in guarantees for loans owed to them by GM and Chrysler. Auto dealers want $5 billion to $20 billion in loan guarantees so that they can finance their inventories. While Ford has said it doesn’t need federal help right now, it initially asked in December for $9 billion in loans and could re-submit the request.

Finally, the “Cash for Clunkers” tax credit, in which owners of inefficient vehicles more than 10 years old would receive a $10,000 tax credit for buying new efficient vehicles, is still floating around Congress is various guises after being stripped out of the stimulus package. The estimated cost to taxpayers is about $16 billion for the tax credit. Sen. Barbara Mikulski of Maryland has trumpeted a proposal to allow car buyers to deduct interest from their auto loans on their taxes, which was also taken out of the stimulus bill in favor of a deduction for sales taxes on new car purchases. The auto industry has heavily backed these bills, believing that they would stimulate demand for new cars.

GM and Chrysler have made dire predictions for what might happen if they go into bankruptcy. They said that if they were unable to find loans or the government did not lend to them, the move could cost the federal government hundreds of billions of dollars in lost tax revenue. CNN’s xperts agree with this analysis, and say that a bankruptcy of the magnitude of GM’s has not ever occurred before.

The Industry Minister of Canada said GM Canada’s plan for viability, presented to the Canadian government last Friday, is on the right track but no decision will be issued yet on any emergency aid to the Canadian wing of the troubled American automaker.

The minister, Tony Clement, told the Canadian Broadcasting Corporation (CBC): “We have to go through their numbers to see exactly what they have planned for the Canadian plants… but we’ve certainly got the skeletal structure of what they’re going to do.”

Chrysler Canada also submitted its own restructuring plan to the country’s government. At first, it turned in a copy of its plan it had submitted three days earlier to the United States government, explaining that it views the North American auto industry as fully integrated. Over the weekend, Chrysler gave further details on its specific plans for Canada. About 25% of Chrysler’s manufacturing is located in Canada, and the car company gave more details about how it will use its Ontario plants during its restructuring. GM and Chrysler are asking for bailouts from the Canadian government in proportion to the percentage of manufacturing they have in the country.

“I think that they (GM and Chrysler) realize they are at the precipice of nonexistence as a sector, or at least a North American sector, and so I think they’re looking at this seriously. They’re coming forward with some serious plans and we’ll be evaluating them over the next few days.” — Tony Clement, Canada’s Industry Minister

Unlike their specific requests for American aid, GM and Chrysler did not give specific monetary requests in their reports to the Canadian government.

If they emerge from their current economic difficulties, GM and Chrysler will be “lesser players on the world stage” according to CNN.

The “sadly shrunken companies” are hard to predict for the short term, but the long term CNN’s auto editor finds easier: Chrysler will be “a bit player in the American market and remain a negligible one overseas.” The editor continues:

“As for General Motors, I fear a worse fate – that of a shrunken giant, an aging athlete with its best years behind it playing out the string.

Human nature tells you how difficult it is for anyone to accept a lesser role in life, no matter the circumstances. GM has already lost its title of world’s largest automaker to Toyota. Now it risks slipping behind more dynamic competitors like Volkswagen and Hyundai.

Once it is no longer one of the biggest, GM will no longer have a claim at being the best. The brightest talent will look elsewhere for jobs; suppliers will take their new ideas to companies that are growing, not shrinking; top dealers will accelerate their divestment of GM franchises.

As it becomes smaller, GM will lose the advantages of scale. The car business is a volume business; your cost per unit goes down as your volume goes up. Plants run more efficiently, investments can be spread over a larger cost base and parts cost less. Toyota is a master of using volume to its advantage, which explains its standing in the industry.

GM will also no longer be able to afford the investments in new technology that will be essential to the automotive future. With its vast resources, the automaker used to be able to afford to dabble in a number of alternative fuel strategies – battery, ethanol, hybrid, fuel cell. It wasn’t a leader but it could keep pace by spreading its bets over the whole field.

But a smaller GM will have to make choices and focus its resources – something it isn’t used to doing. The cost will be higher and the chances of failure greater.

It was good to be the king and it is going to be very difficult to adjust to becoming just another prince. One of the sources of GM’s difficulties even before the current crisis was its inability to scale its overhead and its aspirations to its reduced circumstances.

Now, assuming that GM makes it through to 2012 when it says it will be profitable again with government help, it will have to find a whole new way of looking at the world.

That may be the hardest job of all.”

Michigan Rep. Sander Levin, brother of Senator Carl Levin, makes the case for America bailing out the auto industry as the second half of a debate that ran on USA Today’s editorial page.

Levin argues that the auto companies helped create the middle class and is part of the “fabric of our nation.” Levin blames the government for not providing national health care or investing in “advanced technologies” as he says other countries did. Those other countries, he also points out, have also bailed out their auto industries.

In USA Today’s featured editorial page debate for Wednesday, February 18, the newspaper’s opinion editors asserted that the government now faces two major questions in regards to the bailout: should taxpayer dollars be handed to Detroit? And what should be done about the many retirees and their dependents who can no longer rely on Detroit to provide for their needs.

USA Today believes that President George W. Bush, in giving GM and Chrysler a lifeline for a few months and a few billon dollars, was handing his successor Barack Obama an even tougher job: deciding whether to continue what has now become the status quo of financial aid for automakers or cut the strings loose. USA Today writes, “To no one’s surprise, the automakers are back for more.”

Should the government prevent bankruptcy or rely on bankruptcy as an effective way for GM and Chrysler to restructure? Should only the weakest be allowed to fail? Are GM and Chrysler’s plans for viability “realistic and sufficient”? “President Obama’s auto task force should review the plans with an eye toward protecting taxpayers and the broader economy, not hte various stakeholders in an industry that for too long has operated too many product lines and made too many mediocre cars.” At the same time, after “years of trimming, the industry is too small to pay the legacy costs of its former, much larger, self.”

The $20 billion GM in particular has committed to providing to an employee healthcare trust is worth 15 times the current market value of the company itself ($1.3 billion). The opinion editors conclude, “The fact is, autoworkers have long had some of the most generous health benefits available to American workers, with minimal co-payments and deductibles. Retirees might have to settle for Medicare when they’re eligible, plus some sort of employer-provided Medigap policy.”

USA Today concludes that these two separate questions need to be answered one at a time.

In its hotly awaited viability plan submitted to the government today, GM requested up to $30 billion more in aid from the federal government and pledged to do its part to save cash by cutting 47,000 jobs worldwide. It will shut five United States factories.

Despite the dire outlook and requests for a total of $30 billion, GM said it could become profitable again in two years and pay off the government loans by 2017.

Meanwhile, the UAW said it had reached tentative agreement on concessions talks with GM, Chrysler and Ford, but would not release details until the plan was fully hammered out.

The Obama administration’s auto task force will review the reports from GM and Chrysler and make a decision on any further aid by the end of March; the deadline could be extended to April if required. If the government deems the reports unsuitable for profitability and recalls its loans, GM and Chrysler would most likely go into bankruptcy.

In addition to $2 billion in both March and April of this year, GM details a revolving line of credit it must refinance in 2011 for $4.5 billion; GM predicts private lenders will not refinance the debt, so it wants the government to do so. GM predicts that if it goe sinto bankruptcy, the government will be forced to act as its lender to the tune of $100 billion.

GM insiders say the company will present two choices in its submitted report today: more bailout funds from the government, or government backing for a bankruptcy filing.

Last-minute concessions negotiations between the UAW and both GM and Chrysler were said to continue all through last night.

President Obama backed away from a prior promise to appoint a car czar to oversee GM and Chrysler, instead deciding to name a Presidential Auto Task Force under the leadership of Treasury Secretary Timothy Geithner and Ron Bloom, a former adviser to the United Steelworkers that told the steel workers’ union to accept major concessions as part of bankruptcy filings. Will Bloom do the same with the UAW and GM? Those who’ve previously worked with Bloom think so.

“The management of the Big Three are probably not going to like what Ron Bloom has to say; the UAW is not going to like what Ron Bloom has to say; and certainly the stockholders and creditors will not like what he has to say,” said Michael Psaros, a co-founder of private-equity group KPS Capital Partners, who has worked with Mr. Bloom in and out of bankruptcy courts. He adds that Mr. Bloom has “repeatedly shown an ability to transform struggling companies into profitable going concerns.”

GM and Chrysler’s plans for viability are to be submitted to the Treasury Department by 5pm today, Tuesday and are required to include concessions from the UAW on labor and healthcare costs. In addition, GM’s bondholders are required to make similar concessions on debt and according to insiders in on the negotiations, the bondholders presented a plan to the GM board on Monday.

What else will the reports include? What else can GM cut?

GM could announce plans to axe one or more brands, including Hummer, Saab, Saturn, or even its old mainstay, Pontiac. GM has previously said that all these brands are on the table. It has also said in previous filings with the government before a bailout was granted that it could decrease American plants from 47 to 38 within four years. The Wall Street Journal reported Saturday that GM will outline a bankruptcy contingency plan in its report, although it has previously said that bankruptcy is untenable. An insider reports that GM will argue that the government would spend more on the company in a bankruptcy situation than it would to keep GM from bankruptcy.

Chrysler could announce a renegotiation of its secured debt (it’s not saddled with the massive amounts of unsecured debt that GM is), plant closings, or international partnerships with Nissan or Fiat, which recently took large shares of the company in exchange for partnership plans for small cars.