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DETROIT -(Dow Jones)- Chrysler LCC, the most financially stressed of the three U.S. auto makers, said it won’t have enough cash to cover its major first- quarter expenses without $7 billion in low-interest loans from the government.

The auto maker said its cash reserves will drop to $2.5 billion by the end of the year, although it is facing major expenses totaling $11.6 billion for the first quarter of 2009. The loan, coupled with its ongoing restructuring efforts, would keep Chrysler operating through March 31, 2009. Chrysler also asked that the loans be provided to the company by Dec. 31.

“Chrysler anticipates that the federal loan will function as additional adequate assurance to our suppliers, customers and employees that the company will make it through this extraordinary time,” Chrysler Chief Executive Bob Nardelli said in the plan.

Chrysler, along with General Motors Corp. (GM) and Ford Motor Co. (F) each submitted business plans Tuesday in hopes of winning $25 billion in low interest loans from the government. GM is looking for a total of as much as $18 billion in loans while Ford wants $9 billion. Legislators turned the auto makers away last month, demanding that they first provide a spending plan for the funds.

Nardelli along with CEOs Alan Mulally of Ford and Rick Wagoner of GM are expected to appear in Washington D.C. for hearings starting Thursday. Both Nardelli and Mulally are driving to the hearings from Michigan. The three leaders were chastised by lawmakers for flying to Washington in their private jets to seek a taxpayer-funded rescue.

Chrysler also ruled out the possibility of a pre-packaged bankruptcy, saying that any bankruptcy filing would take years to complete, there would be no way to reject or modify union bargaining agreements and it is unlikely the company could get financing. The auto maker said it would need as much as $20 billion in one-year financing to survive.

If Chrysler were to liquidate, all 22 of its manufacturing plants would close, 53,000 out of the company’s 55,000 hourly employee and salaried employees would be let go and no payments would be made on the $7 billion in outstanding auto supplier invoices.

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