Washington: US President George W Bush said the government will provide ailing US automakers financial aid while they implement plans to restructure because otherwise their collapse could send the economy into a deeper and longer recession.
"The American people want the auto companies to succeed and so do I," he said while announcing $17.4 billion in loans to the automakers.
An administration official said he expects General Motors and Chrysler LLC to access the money immediately, a senior administration official said on Friday.
Some $13.4 billion will be made available in December and January from the $700 billion fund that was originally designed to rescue struggling financial institutions, but the loans would be called back if the automakers cannot prove they are viable by March 31, the official said.
Viability would be mean that the companies must have a positive net present value, which doesn't necessarily mean immediate profitability but would require them to reach that point relatively soon, the official said.
The three-year loans would require limits on executive compensation and other perks, and the automakers would also have to provide warrants for non-voting stocks.
The remaining $4 billion in aid is contingent on the administration seeking access to the second half of the $700 billion financial rescue plan, known as the Troubled Asset Relief Program, the official said.
Comments
0 comment