General Motors has been forced to ring-fence its international operations, country by country, to satisfy individual European governments that state aid will be used only to protect jobs within each of their borders.

Rick Wagoner, chief executive of GM, said that America's biggest carmaker would “structure ourselves accordingly” to meet the demands of governments, including those of Britain, Spain and Germany, which have sought to bail out their national car industries with state loans.

Governments outside the United States have been anxious that any state loans offered to subsidiaries of GM, such as Vauxhall in Britain and Opel in Germany, could be clawed back to the distressed American parent. It is understood that Whitehall also sought similar reassurances when British carmakers begged for credit guarantees in November from Lord Mandelson, the Business Secretary. Such discussions appear to have reached stalemate.

Speaking at the Detroit Motor Show, Mr Wagoner said: “There are some sovereign constraints. We need to pay attention to funds' flow and to structure ourselves accordingly. Any government is going to look for some commitment along those lines.”

Mr Wagoner and Robert Nardelli, his counterpart at Chrysler, are drawing up business plans for the incoming Obama administration that demonstrate why the companies deserve a multibillion-dollar bailout to help them to survive the global economic slump. The plans must be submitted by March 31.

General Motors and Chrysler are banking on Mr Obama, who enters the White House on January 20, to replace $17.4 billion worth of existing loans with longer-term, federal assistance. The plans will include brutal wage cuts, benefit reductions and redundancies, about which Mr Wagoner is in talks with the United Auto Workers union.

According to Mr Wagoner, GM has already reduced its wage bill in the US from $18 billion in 2003 to about $10 billion last year and is aiming to reduce it to between $4 billion and $5 billion by 2012.

As well as cutting wages, GM, Chrysler and Ford are in talks with unions over plans to reduce pension payments and medical insurance benefits for workers who have already retired. The proposals have drawn protests from retired workers, about 70 of whom staged a demonstration outside the motor show.

Pete Pellerito, a 50-year-old maintenance painter who retired last year, was the third generation of his family to work for Ford. His grandfather joined the car manufacturer in 1917. Mr Pellerito urged Washington to prop up America's carmakers with federal aid.

Paul Wohlfarth, a 54-year-old Chrysler retiree, told The Times: “I am not a socialist. I am here for my family. They want to take my benefits away from me — what I have worked for for 31 years. They want to pull the rug out from under me.”

Mr Wohlfarth worked for years as an engineer at the Chrysler plant in Toledo, Ohio, building the Wrangler Jeep, which was developed from a model that was used in the Second World War. “I saw this coming. The bankers caused this problem. We were doing fine until the bankers stole America from us,” he said.

“I will probably have to try and get another job, but there are new college graduates coming out of school now who can't even get jobs.”

Mini goes green as Bentley cuts back

— Mini – now owned by BMW – has tested its new electric car with 500 residents in New York, Los Angeles and Berlin as part of a plan to roll out the e-Mini this year. The car takes 2½ hours to recharge and should cover 156 miles. At the Detroit Motor Show, Mini said that the US was its biggest single market, accounting for a quarter of all sales. It sold 54,000 there last year, a 29 per cent increase on 2007. While the new e-mini has not yet been priced, a standard mini costs from $19,200 to $30,000.

— Bentley, one of the world’s most exclusive car brands, said that if demand continued to slump, it was prepared to cut production at its plant in Crewe. Bentley, whose models start at £115,000 and rise to about £170,000, said that while it had cut production in September and at Christmas, the group “would have to look at it again if the market drops further. We expect 2009 to be a difficult year.” The 7,604 cars that Bentley sold in 2008 were 24 per down on the level of the year before.

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