Down the Toilet: U.S. to give Chrysler, GM new aid
WASHINGTON (Reuters) – The Obama administration will make about $500
million available to Chrysler LLC through the end of this month as it
seeks to reach an alliance with Fiat, and up to $5 billion through May
to help General Motors Corp restructure outside of bankruptcy, an
independent oversight report on the Treasury Department's corporate
rescue fund said on Tuesday.
Separately, the United Auto Workers (UAW) union urged its members to
lobby the White House by phone or email to ensure that workers and
retirees are treated fairly in negotiations at both companies on new
concessions, which are considered vital for the automakers' to survive.
"We need President (Barack) Obama and his auto task force to stand up
for the interests of workers and retirees in these restructuring
negotiations," the union said in an appeal on its Web site to members.
The UAW represents about 26,000 workers at Chrysler and 62,000 at GM.
The union is under pressure along with bondholders and banks to help
Chrysler and GM slash debt so they can restructure. The central issue
for the UAW and the car companies is reaching an accord on restructuring
the finances of a multi-billion-dollar retiree health care trust.
The administration's task force does not believe Chrysler can stand
alone and is brokering meetings this week in Washington and Detroit to
see if a deal with Fiat is possible.
The administration has offered up to $6 billion to help finance the
alliance that would give Chrysler access to Fiat's small car technology
and the Italian automaker a platform for building light trucks and a
robust network for selling its vehicles in the United States.
Analysts and consultants have questioned whether the companies can close
the deal and avert what most believe would be a certain Chrysler bankruptcy.
At the White House on Monday, Obama's chief spokesman, Robert Gibbs,
would not forecast where the talks were headed but said the
administration was working "with all of the stakeholders involved" and
was hopeful a solution would be found to "continue the Chrysler brand"
and strengthen the industry overall.
"The President continues to be involved in this issue and understanding
the tremendous economic importance both for the overall industry and for
the dozens of communities throughout the country that are dependent upon
Chrysler and auto parts suppliers that supply Chrysler for good-paying
jobs," Gibbs said.
The administration in March set aside up to $500 million to help
Chrysler get through April, according to a report on oversight of
corporate bailout funds prepared by the Treasury Department inspector
general. GM was slated to receive up to $5 billion through May.
GM said on Monday it would cut another 1,600 salaried jobs by May 1. The
reductions are part of GM's plan to slash its global salaried work force
this year by about 10,000, or 14 percent. GM also aims to cut 37,000
hourly jobs worldwide by the end of the year.
GM and Chrysler, controlled by Cerberus Capital Management, received a
$17.4 billion government bailout in December. Ford Motor Co is also
struggling but opted against seeking rescue funds.
GM Spent $2.8M Lobbying Government In The First Quarter