The financial turmoil at the car makers comes at a time when many potential car buyers are dealing with their own money problems, sending new car sales to some of their lowest levels in more than a quarter century.
Analysts have speculated that Auburn Hills, Mich.-based Chrysler could be forced to liquidate if it doesn't meet its deadline, while Detroit-based GM could be forced into Chapter 11 bankruptcy protection.
But even with those dire consequences, the deadlines could be tough to meet. Both automakers have already slashed their payrolls and shuttered numerous plants in an attempt to cut costs in the face of record low sales.
GM said in February it would cut 47,000 jobs worldwide by the end of the year. Presumably those cuts will come sooner.
But GM's bondholders have been reluctant to settle their $28 billion in bonds for what may be pennies on the dollar, and the company still hasn't reached a deal with the United Auto Workers on funding a union-run trust that will take over retiree health care costs.
Fritz Henderson, the company's new CEO, said GM also must slash its staggering liabilities—not just the $49 billion in bond debt and secured loans, but also pension obligations and retiree health care costs.
Meanwhile, it appears that Chrysler and Fiat may be making progress on a deal for an alliance, with Fiat CEO Sergio Marchionne flying to Detroit late Monday for talks.
Also on Tuesday, both GM and FordMotor announced they would offer payment protection plans to help reassure consumers who may be putting off buying a new car because of worries about losing their job.
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Dearborn, Mich.-based Ford said it will cover payments of up to $700 each month for up to a year on any new Ford, Lincoln or Mercury vehicle if consumers lose their jobs. The program runs until June 1.
Under GM's program, the company will make up to nine car payments of $500 each for customers who have lost their jobs through no fault of their own. An increasing number of businesses in the United States, both from the auto industry and elsewhere, are throwing a lifeline to the unemployed as they try to jumpstart sales.
Customers must qualify for state unemployment to be eligible. The program starts runs until April 30.
Hyundai Motor launched a program in January that allows buyers to return a vehicle within a year if they can't make the payments due to a job loss or disability. It later expanded the program with an offer to pay a customer's lease or loan payments for three months while they look for a job.
Hyundai credited the program with helping it avoid a double-digit sales decline last month.
GM and Ford's announcements come a day after President Barack Obama said the government will back new car warranties issued by GM and Chrysler to help boost consumer confidence about buying their vehicles.
Ford has not requested federal bailout funds.