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Chrysler, GM to get shot in arm

(China Daily)
Updated: 2009-04-22 08:02

The Obama administration will make about $500 million available to Chrysler LLC through the end of this month as it seeks to reach an alliance with Fiat, and up to $5 billion through May to help General Motors Corp restructure outside of bankruptcy, an independent oversight report on the Treasury Department's corporate rescue fund said yesterday.

Separately, the United Auto Workers (UAW) union urged its members to lobby the White House by phone or e-mail to ensure that workers and retirees are treated fairly in negotiations at both companies on new concessions, which are considered vital for the automakers' to survive.

The UAW represents about 26,000 workers at Chrysler and 62,000 at GM.

The administration's task force does not believe Chrysler can stand alone and is brokering meetings this week in Washington and Detroit to see if a deal with Fiat is possible.

The administration has offered up to $6 billion to help finance the alliance that would give Chrysler access to Fiat's small car technology and the Italian automaker a platform for building light trucks and a robust network for selling its vehicles in the United States.

Analysts and consultants have questioned whether the companies can close the deal and avert what most believe would be a certain Chrysler bankruptcy.

At the White House on Monday, Obama's chief spokesman, Robert Gibbs, would not forecast where the talks were headed but said the administration was working "with all of the stakeholders involved" and was hopeful a solution would be found to "continue the Chrysler brand" and strengthen the industry overall.

The administration in March set aside up to $500 million to help Chrysler get through April, according to a report on oversight of corporate bailout funds prepared by the Treasury Department inspector general. GM was slated to receive up to $5 billion through May.

GM said on Monday it would cut another 1,600 salaried jobs by May 1. The reductions are part of GM's plan to slash its global salaried work force this year by about 10,000, or 14 percent. GM also aims to cut 37,000 hourly jobs worldwide by the end of the year.

GM and Chrysler, controlled by Cerberus Capital Management, received a $17.4 billion government bailout in December. Ford Motor Co is also struggling but opted against seeking rescue funds.

Reuters

(China Daily 04/22/2009 page17)