The chiefs of Ford, Chrysler and General Motors have agreed to be paid $1 a year in return for a $31 billion (£21bn) loan from the US government.

Alan Mulally, the chief executive of Ford, Rick Wagoner, his counterpart at General Motors, and Robert Nardelli, the head of Chrysler, will all take a 67p annual salary and have agreed to sell their company jets.

Mulally earned $21 million last year and Wagoner earned $14.4m. As Chrysler is a privately owned company it does not disclose pay figures.

The US manufacturers presented their plans to the US government on how they would pay back the state aid yesterday and will each be questioned by congress today and tomorrow.

Ford has already revealed that it is considering a sale of its Swedish brand Volvo and will be heavily investing in fuel-efficient cars. All bonuses for Ford management across the globe will also be cancelled next year.

General Motors says it needs $4 billion in Government loans this month and a total of $12 billion by late March to continue operating.

Mulally said Ford requires a $9 billion 10 year federal loan to act as a cushion if conditions deteriorate.

Chrysler has asked the US Government for a $7 billion bridging loan by December 31 to ensure liquidity.

Meanwhile, year-end bonuses for thousands of managers at Toyota Motor will be reduced as part of a cost-cutting drive due to falling sales.

The decision affects about 8,700 middle and senior managers, reports the Financial Times.