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Treasury lends $2 billion more to GM

April 24, 2009

Treasury lends $2 billion more to GM


WASHINGTON – The Treasury Department loaned General Motors an additional $2 billion this week, bringing the total lent so far to the biggest American carmaker to $15.4 billion.

The additional loan was made Tuesday, according to a report by the U.S. Treasury Department, which issued reports regularly on funds loaned under the federal Troubled Asset Relief Program, or TARP. So far, $26.8 billion has been loaned under TARP’s Automotive Industry Financing Program, including $4 billion to Chrysler LLC, $5 billion to GMAC and $1.5 billion to Chrysler Financial. Another $900 million was loaned in late December to GMAC that passed through GM’s books first.

A White House official said this week’s payment reflects the administration’s already stated position that it would provide adequate working capital to GM and Chrysler as they work toward finalizing restructuring plans.

GM has until the end of next month to restructure its debts and come up with a more aggressive plan for transforming itself into a more viable automaker going forward. Otherwise, the Obama administration has threatened calling the loans – which would send the company into bankruptcy.

GM issued a statement saying the funding is needed “to maintain adequate liquidity as the company undergoes an aggressive restructuring.”

Earlier this week, a special inspector general’s report indicated that GM could receive up to $5 billion during a 60-day extension for restructuring given the company at the end of March.

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