GM Gets $5.4 Billion Loan Installment From Federal Government
22 Januar 2009 - 12:34AM
Dow Jones News
General Motors Corp. (GM) on Wednesday received a $5.4 billion
infusion from the U.S. government, the second installment of a
$13.4 billion emergency loan package approved last month.
The auto maker had been expecting the cash on Jan. 16, but the
payout was held up as it worked through the application
process.
Without the money, GM, fighting to avoid a Chapter 11 bankruptcy
filing, had said it wouldn't have enough cash to run the
business.
(This story and related background material will be available on
The Wall Street Journal Web site, WSJ.com.)
The Bush administration approved a $17.4 billion loan package
for GM and troubled rival Chrysler LLC in December amid warnings by
the companies that they would go bankrupt without aid, creating a
ripple effect of hundreds of thousands of lost jobs.
Chrysler already received its $4 billion loan. GM has now
received $9.4 billion and is due for another $4 billion if it
successfully completes a restructuring plan required by the
government by Feb. 17.
Under the deal, GM by then must have made substantial progress
toward agreements with its bond holders and labor unions to reduce
debt and labor costs. The auto maker has until March 31 to
implement much of the restructuring required under the deal.
GM Chief Operating Officer Fritz Henderson said Tuesday he
believes GM will meet requirements of the loan. He said while
progress is required by Feb. 17, major initiatives - such as
launching the debt exchange - can wait until the March
deadline.
-By Sharon Terlep, Dow Jones Newswires;
sharon.terlep@dowjones.com
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