GM Has Yet To Get US Federal Loan, Expects Cash Soon
16 Januar 2009 - 11:57PM
Dow Jones News
General Motors Corp. (GM) has yet to receive $5.4 billion in low
interest U.S. government loans slated to be released Friday, a
delay the auto maker attributed to the complex application
process.
GM still expects to receive the second installment of a $9.4
billion federal lifeline granted last year to save the auto maker
from bankruptcy, spokeswoman Julie Gibson said. The company Friday
was still working through the application for aid.
She said a short delay poses no threat to the company.
The Detroit-based auto maker, racking up billion-dollar losses
amid slowing sales, needs the money to fund its continuing
operations. GM received its first, $4 billion installment on Dec.
31 just before the company would have defaulted on billions of
dollars in payments to suppliers.
GM and Chrysler LLC secured the loan guarantees last month after
President George W. Bush gave the auto makers access to the $700
billion bank bailout passed by Congress last year. The companies
must repay the loans in three years. They could be recalled by the
government if the auto makers can't prove they're on their way to
becoming viable by March 31.
Ford Motor Co. (F), based in Dearborn, Mich., has said it does
not intend to use government money to fund operations, and has
passed on the initial loans. The auto maker Friday reiterated its
plan to avoid asking the government for money to fund its
operations following news that its financing arm, Ford Credit, was
in talks with government over financial assistance.
"We did not and are not seeking short-term financial assistance
for our automotive operations from the government," the auto maker
said in a statement Friday.
A slowdown in global automotive sales combined with locked-down
credit markets have pushed GM and Chrysler to the breaking point.
GM, Chrysler and Ford have cut workers and idled production plants
in order to control costs.
-By Sharon Terlep; 248-204-5532; sharon.terlep@dowjones.com.
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