At the moment there is no bankruptcy at General Motors, Chrysler or Ford. The U.S. government approved an injection of 12,500 million for the car
| Date: December 19, 2008 | Source: Europa Press |
| Category: Economy | |
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Loading ... The U.S. government today agreed to allocate an injection of 17,400 million (12,500 million euros) to the car industry, in order to prevent its collapse, while the aid is conditional on the submission of plans to ensure future the profitability of companies.
In particular, the aid are instant loans for an amount of 13,400 million (9640 million), plus an additional line of 4,000 million (2,900 million), if the manufacturers comply with their commitments in the coming two months.
The outgoing U.S. President George W. Bush said at a news conference that the aid, rejected by Congress, will come from the economic rescue plan of 700,000 million dollars (about 500,000 million), submitted two months ago .
Bush Administration sources explained that General Motors and Chrysler to immediately gain access to the allotment by the Government. Ford, meanwhile, said it has sufficient liquidity to continue its operations in the short term.
NOT A BANKRUPTCY BY THE TIME
Bush said in an appearance that the government has rejected for now the possibility of allowing the bankruptcy of major automotive groups, since this would make the recession longer and "the next president would face the death of a vital industry."
"The recommended option is to organize outside of bankruptcy," defended U.S. President, who nonetheless said that manufacturers will have three months to submit its reorganization plans and companies become "viable". "If you can not comply, then we will prepare to file for Chapter 11 of the Bankruptcy Act," he said.
The president said that "to avoid collapse, the government must intervene." "The people and I want the manufacturers to move ahead (..) must demonstrate how automakers become viable businesses, repay loans and prove they can be profitable."
Bush said he hoped that this step is not necessary, but added no choice has been given the current situation, while urging the commitment of all parties involved in the automotive industry. "You are being given the opportunity to reorganize at a very difficult economy," he said.
December 20, 2008 at 15:02
[...] One of the big three automakers, General Motors, Ford or Chrysler, and finally decided to inject 12,500 million to try to save the [...]