Green light at last for £9bn GM and Chrysler rescue plan
Struggling Detroit carmakers General Motors and Chrysler today finally sealed a $13.4 billion (£9 billion) bailout from the US taxpayer. The deal secured emergency loans as part of a US government aid package.
In exchange, they agreed to sweeping restructuring. They will then receive a
$4 billion bridging loan to keep them in business for several months.
The money should allow the pair to keep operating until March. If they cannot demonstrate that they are financially viable by 31 March, the loans will be called back in and the money must be returned, President George Bush announced.
GM and Chrysler have had to shut down plants and lay off thousands of workers across North America as they try to shore up cash, and have warned they could face bankruptcy without federal assistance.
The aid package assembled by the White House demands that both carmakers restructure by seeking new concessions from unions and creditors.
GM and Chrysler have not commented officially on the aid talks with the Bush administration, which have continued in the past week after an attempt to pass legislation to support the industry failed in the US Senate.
The British Government this week revealed it is considering a £1 billion bailout of Jaguar-Land Rover. This would probably see the taxpayer underwriting loans that would be used to keep the business running.
