GM won't rule out request for more government funds
Detroit - General Motors Corp cannot rule out the possibility it will need another cash injection from the US government after the Bush administration threw ailing automakers a lifeline late last year, GM President Frederick Henderson said at the Detroit auto show on Monday.
GM and Chrysler were given a 13.4-bilion-dollar loan from the government through the end of March, and Henderson said he could not say whether additional help would be need after that.
Chief Executive Rick Wagoner earlier also did not rule out that possibility.
Henderson also said a possible merger between GM and Chrysler is not under discussion, but did not rule out discussions at a later time.
Under the terms of the 13.4-billion-dollar direct loans to the car industry, GM can claim 9.4 billion dollars and Chrysler LLC gets 4 billion dollars over December and January. GM could get another 4 billion dollars in February.
The federal funds come with tough conditions. GM and Chrysler will have to prove they can return to viability or the money could be withdrawn by March 31, likely leaving no option other than bankruptcy.
The money will come from the government's 700-billion-dollar financial rescue package, which was initially reserved for financial institutions, but is now propping up lenders, the car industry and finance companies.
Car sales have plunged some 35 per cent in the last quarter of 2008 as consumers struggled to get loans in the current financial crisis, adding to the woes of an industry that has already been struggling to keep up with more fuel-efficient and cheaper foreign competitors. (dpa)