Underscored by a second-consecutive month of record-weak vehicle sales, General Motors Corp. releases a viability plan to Washington with deep cost-cutting moves and the potential sale of its Saturn and Saab brands.

The plans released today by GM and Ford Motor Co. amid sputtering sales data come ahead of an emergency meeting of United Auto Workers union leaders in Detroit. Chrysler LLC will detail its plans later today.

Sources confirm to Ward’s the UAW meeting will cover possible concessions by labor, including an elimination of the controversial Jobs Bank program and perhaps looser work rules within plants. Other reports suggest the union may reopen the contracts altogether.

“There are certain issues where we have some latitude on the local level,” the source says, indicating UAW leaders will meet with GM, Ford and Chrysler collectively and then break into committees and address the auto makers individually.

GM’s plan also indicates it needs $12 billion in loans, a higher and more specific number than the “$10 billion to $12 billion” it estimated during last month’s hearings with lawmakers.

Washington chided GM for not providing a specific number, before sending the Detroit Three back home to craft the viability plans.

If provided, GM would immediately tap $4 billion. The auto maker additionally indicates in the plan it intends to operate its business in 2009 under industry sales expectations of 12 million units, but seeks an additional revolving credit line of $6 billion in case next year’s sales dip to 10.5 million units.

GM anticipates full repayment of the loans by 2012 under its baseline industry assumptions. In addition, it would issue the government warrants, or preferred stock in the company, as a condition of the loans that would allow taxpayers the opportunity to profit if GM recovers.

“Once GM has completed the restructuring actions laid out in the plan, the company will be able to operate profitably at industry volumes between 12.5 (million) and 13 million vehicles,” GM says in a condensed version of plan released this afternoon. “This is substantially below the 17 million industry levels averaged over the last nine years, so it is considered to be a reasonably conservative assumption for gauging liquidity needs.”

GM says it also supports the formation of a federal oversight board, which would help the auto maker negotiate with a range of its stakeholders during the restructuring.

GM cites a sharp, industry-wide decline in vehicle sales as motivation behind the loan request. In October, the auto maker’s sales fell 47% and in November, deliveries declined 41%. So far this year, GM sales are down 21.9% vs. like-2007, according to Ward’s data.

“This decline, due in large part to tight credit and record-low consumer confidence, has led to a corresponding drop in dealer orders that is adversely impacting GM’s first-quarter production schedules, revenue forecasts, and liquidity outlook,” the auto maker says. “Federal assistance would enable GM to weather a credit crisis that has driven U.S. industry sales to their lowest per-capita level in half a century, and help the company emerge fully competitive with all manufacturers operating in the U.S.”

Mike DiGiovanni, GM’s chief sales analyst, says the auto industry “is in a much more severe situation than the rest of the economy.

“It’s in an unsustainable position and it’s unsustainable for all manufacturers,” he says in a call today with journalists and Wall Street analysts. “We cannot continue to operate at these levels or the entire industry is going to go down, hence the need for federal stimulus.”

But in perhaps the most significant move, GM reveals it will back further away from the 8-brand strategy by placing its Saab luxury unit under immediate review and “accelerate discussions with Saturn retailers, consistent with their unique relationship, to explore alternatives for the Saturn brand.”

The auto maker long has resisted calls to pare back its brands, although it has had its Hummer division up for sale for six months without a taker.

On top of potential divestitures of Saab and Saturn, GM intends to scale back its Pontiac division to a specialty brand with reduced product offerings. Pontiac presently offers six products, with a subcompact and a sport truck due in 2009.

If executed fully, the changes would leave GM with four core brands – Chevrolet, Cadillac, Buick and GMC.

In other steps to improve its long-term viability, GM plans to reduce its executive ranks and the total compensation of its senior leadership. For example, GM Chairman and CEO Rick Wagoner will work for a symbolic wage of $1 per year, following a similar move by Ford’s CEO Alan Mulally.

But in an apparent nod to the UAW, “the plan also requires further changes in existing labor agreements, including job-security provisions, paid time off and post-retirement health-care obligations,” GM warns.

GM’s common stock dividend will remain suspended during the life of the loans.

Addressing the company’s balance sheet, GM says it will reduce currently carried debt, with “plans to engage current lenders, bondholders and its unions to negotiate the needed changes. GM’s plan would preserve the status of existing trade creditors and honor all outstanding warranty obligations to both dealers and consumers, in the U.S. and globally.”

GM additionally says it will accelerate its current efforts to reduce manufacturing and structural costs, and anticipates that recent changes, coupled with those to be negotiated, will bring its wage and benefits for current and future hires competitive with chief rival Toyota Motor Corp. by 2012.

GM also reiterates in the plan recent upgrades to its product portfolio, strides in improving fuel economy and expectations for 15 hybrid vehicles at dealerships by 2012.

The auto maker estimates it will invest $2.9 billion in alternative fuels and advanced propulsion technologies between 2009 and 2012, offering fuel-economy improvements between 12% and 120%, compared with conventional gas engines.

At a press conference in Washington, Sen. Carl Levin (D-MI) calls GM’s plan, as well as the plans released earlier by Ford, “detailed” and “comprehensive.”

“I think this is an honest statement of their needs,” Levin says in a conference call with journalists. “Congress wanted it to be honest and forthright, and that’s what they’re getting.”

The longtime industry ally also downplays the higher amounts sought by GM and Ford. GM essentially is asking for $18 billion, and Ford upped its request to $9 billion from $7 billion.

“That should be taken as a response to the Congressional statement to tell them what it needs, so there are no further (loan) applications for funding down the road,” Levin says.

GM also reveals intentions today to cease operations at General Motors Transportation Services at Detroit Metropolitan Wayne County Airport and pursue a sale of its four leased aircraft, as well as a new tenant for the facility. Citing cutbacks in recent months, the auto maker says its travel volume “no longer justifies a dedicated corporate aircraft operation.”

The company’s jets drew a firestorm of negative publicity when Wagoner used one of the aircraft to travel to Washington in the industry’s bid for $25 billion in government bridge loans to carry it through the economic downturn. GM’s board of directors in the past has demanded Wagoner use corporate jets for security reasons.

Wagoner will travel to Washington later this week for a second round of hearings with lawmakers over the loans, but use a Chevrolet Malibu Hybrid midsize sedan among other vehicles on the 520-mile (836-km) route. Wagoner is expected to testify alongside Mulally, Chrysler Chairman and CEO Robert Nardelli and UAW President Ron Gettelfinger as early as Thursday.

– with Byron Pope