GM, Chrysler May Get U.S. Loans to Survive to March

Discussion in 'Stocks' started by ASusilovic, Dec 19, 2008.

  1. General Motors Corp. and Chrysler LLC would get U.S. loans to stay afloat until March under a Bush administration rescue plan that may be unveiled as soon as today, people familiar with the talks said.

    The government could take back the money should the automakers not comply with federal restrictions as a condition of receiving the funds, said the people, who asked not to be identified because the discussions are private. The plan isn’t final and may change, the people said.

    The aid is intended to help GM, the largest U.S. automaker, and No. 3 Chrysler avoid collapse because they may run out of operating funds by early next year. GM and Chrysler have said they need $14 billion to stay in business through March and are temporarily idling plants to trim expenses.

    O.K. So how many workers will they lay off as an expected "restructuring" will occur ? :confused:
  2. Daal


    dont worry I think your job is safe
  3. How does the Government take back money that was given and spent?
  4. JamesJ


    the american way.

  5. TGregg


    “I have abandoned free-market principles . . . ,” Bush said in a CNN interview airing the same day.

    Bush, Congress and the Fed. But at least Bush admits it.
  6. GM aid package is very similar to the proposal the company submitted according to conference call. The company has seen the impact in the showrooms and will focus on getting people back to the dealerships via incentives.
  7. anyone have any good sites?
  8. hiptogo


    why was the car CZAR excluded?
  9. General Motors Corp., buoyed by $4 billion in emergency loans, is “whacking” at its cost structure to withstand reduced demand and conserve cash, Chief Executive Officer Rick Wagoner said.

    U.S. industrywide sales may run in the 10 million range all year, Wagoner told reporters at the Detroit auto show today. Those purchases plummeted to 13.2 million in 2008 after averaging about 16 million annually during the past decade.

    Plans for the sale of the Saab unit are “moving along,” and GM has found interested parties, Wagoner said, without identifying prospective buyers. GM said Dec. 2 it is considering options for Saab and Saturn and will shrink offerings for Pontiac, expanding an earlier plan to sell Hummer.

    Eliminating brands and dealers is part of GM’s plan to restructure its business in exchange for $13.4 billion in U.S. aid. The automaker is seeking concessions from its biggest union and is chopping debt in half because the government can call the loans should GM fail to show progress by March 31.

    It’s premature to discuss how the biggest U.S. automaker might work with bondholders to win their assent in reducing debt, Wagoner said. Government loan conditions require Detroit- based GM to cut its unsecured public debt by at least two thirds in an exchange with bondholders for equity or other methods.

    Focus on Cars, Trucks

    Wagoner, 55, sought to shift GM’s message back to its products and away from its survival plan by parading 17 current and future cars and trucks through an invited crowd of about 600 employees, retirees and dealers at the North American International Auto Show.

    Members of the throng chanted “here to stay” and carried signs emphasizing fuel efficiency and new technology.

    GM said it will bring a minicar called the Chevrolet Spark to the U.S. market by 2011. It also showed a prototype Cadillac electric car using the next generation of technology from the Volt plug-in auto, which is due to debut in late 2010, along with a new Buick sedan and Cadillac sport-utility vehicle.

    After saying it would run short of operating cash by the end of 2008 without an infusion of financial aid, GM received the first $4 billion in emergency loans on Dec. 31 from the Troubled Asset Relief Program. The money is being used to pay bills, mostly to the automaker’s 3,000 suppliers.

    An additional $5.4 billion is due this month. Should Congress agree to release a second $350 billion in TARP funds, GM will get $4 billion more in February. A progress report must be presented to the Treasury Department by Feb. 17.

    Wagoner said the government loans are sufficient for GM’s current viability plan and that the automaker will reassess its needs at the end of this quarter. He said he is still confident GM will be able to pay the loans back in three years. GM has posted about $73 billion in losses since the end of 2004, the last time it earned an annual profit.

    GM’s U.S. sales fell 23 percent last year, outpacing the 18 percent industrywide decline.

    73 $ billion in losses. That´s enough $ to establish a greenfield carmaker...