8:28 am, January 3, 2009
CHRYSLER has received $4bn in emergency aid from the US Government, as part of last month’s $13bn bailout.
The cash injection will help the company pay mounting bills and avoid administration.
In December, GM received $4bn in loans as part of the same deal. The US auto giant will receive further billions later in the month.
Both companies have had to promise a big restructuring shake up as part of the deal. Some commentators say this may ultimately lead to a merger of the two huge companies.
GM’s financing arm, GMAC, has already been promised bailout funds, too. This fund is co-owned by Chrysler’s parent company.
Car sales in the US have continued to plunge, despite interest rates reaching record lows. This has not helped the position of the companies.
The US Government has set a deadline of 31 March for the auto makers to prove whether they are still viable businesses. At the same time, President-Elect Barack Obama has pledged his support to the car industry.
US stock markets have already responded positively to the bailout package. Yesterday, GM stocks rallied over 14 per cent, as the car maker absorbed its first $4bn aid package.
