US Government Working With General Motors On More Short-Term Aid
01 April 2009 - 9:02PM
Dow Jones News
The U.S. government is moving to provide more short-term aid to
General Motors Corp. (GM) to keep the auto giant afloat as it
spends the next two months completing a new restructuring plan.
The Obama administration is working with GM officials to
determine how much the company needs to survive in the short term,
an administration official said Wednesday. No decisions have been
made on the amount of any new loans or when they would be issued,
said the official, who spoke on the condition of anonymity. The
company has already received $13.4 billion in bailout funds.
On Monday, President Barack Obama set a 60-day deadline for GM
to come up with a new restructuring plan to justify the company's
overall request for up to $16.6 billion in new loans to get through
the recession. But GM has said it needs some of that money
immediately to avoid a collapse - including a short-term infusion
of possibly $2.6 billion, its new chief executive said this
week.
The Treasury has said it would provide "working capital" to
carry GM to the new, June 1 deadline.
It is not clear how much the company will need or by when, but
GM's newly installed CEO, Fritz Henderson, indicated this week that
GM may need at least another infusion of $2.6 billion.
Henderson, speaking to reporters Tuesday, noted that recent
cost-cutting measures allowed the company to withdraw a request for
$2 billion in aid to get through March. He added that he hoped
further cost cutting would allow the company to further delay
requests for aid.
"At this point, frankly, we've been able to push off a lot of
the draws," Henderson said, according to a transcript provided by a
company spokesman. "We'll stay in touch [with the U.S. Treasury] in
terms of whether or not we'll need the 2.6."
Henderson said that the company has been regularly submitting
financial reports to the Treasury detailing its needs but that the
administration hasn't been "explicit" about how much further
short-term support it will provide.
"My anticipation is when they say they'll provide working
capital for 60 days, they'll work with us to do what's necessary to
get through this period and not a dollar more," Henderson said.
A Treasury official told reporters two weeks ago that GM has
requested more aid to get through April.
GM spokesman Greg Martin said Wednesday the company has
"deferred" to the task force on its needs and is still awaiting a
determination.
"They know what we might need," Martin said.
-By Josh Mitchell, Dow Jones Newswires; 202-862-6637;
joshua.mitchell@dowjones.com