Automakers on Deadline; GM to Get $4B
The heat is on for General Motors Corp. (GM) and Chrysler Holding LLC, which are scheduled to submit their restructuring plans before end of day Tuesday. The companies, along with their financing divisions, have received a total $25 billion from the Treasury Department through the Troubled Asset Relief Program on the condition they release strategic plans to restructure their businesses, cut production costs and ultimately pay the government back the loans. GM is slated to receive an additional $4 billion Tuesday, bringing the total amount of capital given to GM to $14,284,024,131-- according to information released by the Treasury. Chrysler has received $4 billion in all. GM's financing arm, GMAC LLC, has received $5 billion, while Chrysler Financial Services Americas LLC has received a loan up to $1.5 billion. The automakers may soon ask for even more funds than they've received so far, according to a Bloomberg article Tuesday. Sources told the outlet GM may seek funds beyond the $18 billion initially requested on Dec. 2, while Chrysler has said it needs an additional $3 billion on top of the $4 it already received. Sources also told Bloomberg GM is eyeing a possible closing or sale of as many as four of its European plants in an effort to cut costs and meet the expectations of a stringent oversight panel to be overseen by Treasury secretary Tim Geithner. Obama has abandoned the so-called "car czar" that would have overseen the auto industry's restructuring efforts in favor of a government panel, with Geithner at the head of the panel overseeing automaker loans. Write to Diana Golobay at firstname.lastname@example.org. Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments. HW reporters and writers follow a strict disclosure policy, the first in the mortgage trade.