U.S. Treasury ends talks with GM/Chrysler for merger funds

[jamz]

Filed under: Government/Legal, Chrysler, LLC., Ford, GM

Any merger talks between Chrysler and General Motors appear to be on hold after the U.S. Treasury has talks with the struggling automakers over their request for a loan. The two automakers were reportedly asking for as much as $10 billion to support a merger, but some say the Treasury was unwilling to give money away for a deal that could potentially result in thousands of lost jobs. The Treasury says automaker financial arms like GMAC and Ford Credit are still eligible for assistance with troubled assets, which could number in the billions of dollars. The Bush administration is said to be working to speed up the $25 billion in loan guarantees that the industry was appropriated to retool factories. Massive government loans can sometimes take 6-18 months to take affect, but the way automakers are burning through cash, GM may need the cash as soon as possible.

There is no doubt these are very troubled times for the U.S. auto industry, and it seems everything is happening very quickly right now. Most forecasts are pointing to a similarly dismal 2009, too, so this mess is far from over.

[Source: Automotive News, sub. req'd]U.S. Treasury ends talks with GM/Chrysler for merger funds originally appeared on Autoblog on Fri, 31 Oct 2008 12:37:00 EST. Please see our terms for use of feeds.


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