By Dow Jones
NEW YORK (Dow Jones) -- Shares of General Motors Corp. rose more
than 10% in opening trades Thursday on reports that automakers
stand to receive additional aid from the federal government.
President Barack Obama's month-old auto-industry task force is
prepared to make its first recommendations with days, and is ready
to advise providing more loans for troubled U.S. automakers, The
Wall Street Journal reported.
Task-force members interviewed for the report said the
administration doesn't want to let General Motors Corp. (GM) and
Chrysler LLC file for bankruptcy, and the group is expected to say
it sees viable futures for both companies, so long as their
management, unions and -- in the case of GM -- bondholders are all
prepared to make sacrifices.
Chrysler and GM have requested $22 billion more in funds,
including $9 billion for the second quarter, but the task force may
not disperse new aid immediately, choosing instead to preserve that
as leverage, the Journal reported.
The Journal's report also said the task force met with officials
from Chrysler and Italy's Fiat SpA and indicated it is still
interested in seeing the two companies form an alliance, as the
automakers have proposed. .
Auto industry analysts said the likelihood of GM and Chrysler
getting extra federal funding was bolstered last week when the
government offered up to $5 billion in financial backing to the
nation's auto parts suppliers. Analysts and investors saw the move
as further commitment by lawmakers to salvaging the struggling
domestic car industry and the roughly 500,000 jobs that go with
it.
At the same time, the number of those on GM's payroll appears
likely to drop soon. According to a report from Bloomberg, GM is
expected to announce Thursday that more than 6,000 members of the
United Auto Workers have accepted buyouts, meeting the company's
target.
This would represent about 10% of GM's UAW workforce, nearly
twice the number that some analysts had expected.
At last check, GM shares were up 30 cents, or 10%, at $3.28. The
stock has surged 76% from its closing low of $1.86 on March 5.