SAN FRANCISCO (MarketWatch) -- General Motors Corp. and Chrysler LLC, both drowning in debt as car sales continue to spiral downward, submitted requests to the U.S. Treasury late Tuesday that, if granted, could provide up to $39 billion in emergency loans to keep the automakers from falling into bankruptcy.

Separately, the United Auto Workers union said it has agreed to a tentative deal to modify labor contracts hammered out in 2007 due to the "extraordinarily difficult economic climate."

The union said terms of the modifications will be made available after working out details of the employees' health-care benefits plan and ratification of the agreement by the union.

Ford Motor Co., F, -1.34% , the other member of Detroit's Big Three, also has been hit hard by the economic downturn but so far has said it does not need federal assistance to survive. The company is shedding jobs and assembly lines to bring its production closer in line with the shrinking market.

GM GM, -2.37% , in a blueprint aimed at convincing legislators it has a plan to survive the current economic crisis, said it could need up to $30 billion in emergency federal loans by 2011 in a worst-case scenario.

The Detroit giant said it also plans to tap funding from other governments, including Canada, Germany, Britain and Sweden, where it has extensive operations and plenty of jobs are at risk.

"GM's plan is comprehensive, responsive and achievable," GM Chairman and CEO Rick Wagoner said in a conference call following the release. "It is based on conservative assumptions, and it is flexible enough to adapt to changing circumstances such as those we've seen since Dec. 2."

GM said it is looking to start paying back the loans by 2012 and have them fully paid off by 2017.

The plan also calls for further cuts in production to match a weaker sales outlook and includes phasing out the Saturn product line by 2011.

Meanwhile, the company said it will concentrate its restructuring effort on its strongest brands: Chevrolet, Cadillac, Buick and GMC trucks.

GM shares closed down 12.8% at $2.18 ahead of the release and have now lost 92% of their value in the past year. The Dow component hit a 71-year low of $1.70 in November.

Chrysler wants an extra $2 billion

Chrysler bumped its request for an additional $3 billion in federal loans to $5 billion, which would bring the total of federal emergency funds received by the third-biggest U.S. automaker to $9 billion.

"We believe the requested working capital loan is the least-costly alternative and will help provide an important stimulus to the U.S. economy and deliver positive results for American taxpayers," Chrysler Chairman and CEO Robert Nardelli said in a statement.

Chrysler slashed its 2009 overall industry sales target to 10.1 million cars and trucks in the U.S., which would mark a 40-year low for the industry, and also cut its annual targets through 2012 to an average of 10.8 million vehicles.

If that prediction holds true, Chrysler said it will result in $18 billion in lost revenue and a $3.6 billion decline in cash flows during the four years.

In addition to the stiff measures already taken in 2008, Chrysler said it plans to cut fixed costs by $700 million this year, while reducing one manufacturing shift, slashing 3,000 jobs and discontinuing three vehicles.

Chrysler also said it has reached an agreement for concessions from the United Auto Workers and expects to reach a deal with bondholders. Chrysler said it anticipates second lien debt holders will agree to convert 100% of their debt to equity and that it is looking to further reduce outstanding debt by $5 billion.

Chrysler said it has suspended the 401(k) retirement plan match, incentive bonuses and merit increases and has also eliminated retiree life-insurance benefits.