Washington, D.C. – U.S. President George Bush has announced that the government will provide US$13.4 billion in short-term loans to the domestic automakers to give them time to restructure. The funds will be distributed to General Motors and Chrysler. Ford had previously requested only access to a line of credit and said it did not require immediate assistance for liquidity.
It is expected that GM and Chrysler will be signing the loan papers to access the funds later today. In a statement, Chrysler CEO Bob Nardelli said that U.S. Treasury Secretary Henry Paulson will provide US$4 billion of initial funding to Chrysler LLC from the Troubled Assets Relief Program (TARP).
“As outlined in our submission to Congress, we intend to be accountable for this loan, including meeting the specific requirements set forth by the government, and will continue to implement our plan for long-term viability,” Nardelli said in a statement. “For Chrysler to succeed in its mission to return to profitability, we need the continued support of our many business partners. Terms associated with the bridge loan include Chrysler’s commitment to work with key constituents, including our owners, lenders, suppliers, dealers, management and employees, to identify and achieve the cost-savings concessions we need to build a long-term viable enterprise. These concessions discussions will happen quickly, as a full governmental review and approval of our plan is expected by March 31, 2009.”
Nardelli also said that Chrysler’s long-term plans include having 500,000 electric-drive vehicles on the road by 2013.
In a statement, GM said that “We appreciate the President extending a financial bridge at this most critical time for the U.S. auto industry and our nation’s economy. This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us. This will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success.”