U.S. nears framework plan for GM, Chrysler

U.S. nears framework plan for GM, Chrysler

Automotive News | March 19, 2009 – 4:00 pm EST


WASHINGTON (Reuters) — The Obama administration’s autos task force may have a framework plan in place as early as next week for restructuring General Motors and Chrysler LLC, two lawmakers said.

Michigan Representatives Sander Levin, a Democrat, and Candice Miller, a Republican, told Reuters in separate interviews that lawmakers were told after meeting with task force members Tuesday that the panel could have a report ready as early as next week. It will map out recommendations for restructuring and the government’s role in a turnaround.

“It won’t be the final step but something significant,” Levin said.

“They said they are two different companies and have different sets of circumstances, so they would have a different set of recommendations,” Miller said of task force thinking on GM and Chrysler.

GM and Chrysler both say they need additional government bailout money to survive, and the administration appears willing to help under certain circumstances.

The two were granted $17.4 billion from the Bush administration in December and are asking for about $22 billion now — more than $16 billion for GM and $5 billion for Chrysler.

The companies are under a March 31 deadline to show the government they can become viable and worthy of new federal assistance.

Levin said the panel also wants GM bondholders to “step up to the plate” before month’s end on an automaker plan to reduce by two-thirds the roughly $27 billion they are owed through an exchange of new equity in a recapitalized company.

Bondholders have balked at a proposal, calling it unfair when compared with payout terms being offered to the UAW.

GM CEO Executive Rick Wagoner said Tuesday that he still hopes the company and bondholders can work something out without government help.

GM and Chrysler also are trying to complete talks on UAW concessions with a plan to partly fund a retiree health care trust with equity rather than cash still a sticking point in negotiations.

Auto-parts suppliers won $5 billion in aid today; they had sought $18.5 billion.


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