GM, Chrysler to get $13.4 bn in US loans | autos | Hindustan Times
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GM, Chrysler to get $13.4 bn in US loans

General Motors Corp and Chrysler LLC will get $13.4 billion in initial government loans to keep operating in exchange for a restructuring under a rescue plan by the US President George W Bush.

autos Updated: Dec 19, 2008 20:42 IST

General Motors Corp and Chrysler LLC will get $13.4 billion in initial government loans to keep operating in exchange for a restructuring under a rescue plan by the US President George W Bush.

The money will be drawn from the Troubled Asset Relief Programme and the auto makers will get an additional $4 billion from the fund in February for a total of $17.4 billion in assistance, according to a statement from the Bush administration. The money would allow GM and Chrysler to keep operating until March.

Under the terms of the plan, if the companies can’t demonstrate financial viability by March 31, the loans will be called and the money must be returned, the statement said. The government’s debt would have priority over any other debts. The companies also must provide the government with warrants for non-voting stock. The companies also must accept limits on executive compensation and management and labour must negotiate new wage and benefit agreements by the deadline, according to an administration official who briefed reporters on the plan.