US Treasury Gives GM $2 Billion

The United States Treasury department agreed to direct up to $2 billion in state loans to General Motors, the American car manufacturer who is likely to get up to $5 billion in government funds, according to Obama's administration. As part of the US Task Force's efforts to help ailing automakers, the Treasury also approved $500 million for Chrysler but no new working capital has been provided for this company, Autonews wrote citing a transaction report for the Treasury's Troubled Assets Relief Program.

The total government loan package offered to General Motor is now $15.4 billion, thanks to the $2 billion aid approved on Friday.

In a statement published on its official website, General Motors applauded US Task Force's decision to approve new funds for the company and expressed its full commitment to comply with government requirements and collaborate with officials upon the restructuring plan.

"GM confirmed today that it will draw an additional $2 billion in U.S. Treasury loans to maintain adequate liquidity as the company undergoes an aggressive restructuring. As indicated in GM's February 17 viability report to the U.S. Treasury, the additional funding will be consistent with projected incremental draws that GM could need in the 2nd Quarter of 2009. Today's loan draw will bring the total U.S. Treasury funding received to date to $15.4 billion.

We appreciate President Obama's and his Administration's ongoing support of GM and the domestic U.S. auto industry as we undertake the difficult but necessary actions to reinvent our company. We will continue to work closely with members of the President's Auto Task Force throughout our reinvention and together we will continue to monitor our liquidity needs during this period," the company said in the statement.

Following the survival plans submitted on February 17 to the United States officials, Chrysler and General Motors had been given a deadline of 30 and 60 days respectively to revise the papers. Chrysler today announced it has reached a deal with the Canadian Auto Workers (CAW) union and will continue negotiations with Fiat regarding the proposed strategic alliance.