General Motors Corp. is currently in talks with government officials about obtaining $5 billion in aid to help with the possible merger with Chrysler LLC. GM Chairman and CEO Rick Wagoner has been periodically meeting with members of the Treasury, U.S. Energy Department, and the U.S. Commerce Department.
Obtaining these funds is key to the potential merger, as the $10 billion debt held by Chrysler would need to be resolved in order for a smooth transaction to occur. The funding would also help pay for numerous buy-outs and other costs that would naturally be part of a merger between two companies this large.
Particularly of interest to GM is the $25 billion in loans intended to spur the production of alternative-fuel vehicles – not necessarily to serve as an infusion of capital. As the automakers’ troubles are viewed as being intertwined with the economy’s health, the White House is now actively observing this delicate deal.
“Those loans are specifically geared toward revamping those factories. That’s not necessarily going to help immediately with a capital problem,” said White House spokeswoman Jennifer Zuccarelli. “So I would not say that they are stuck over there. I can tell you from watching them that they are working very closely and are keeping us updated over here.”
Source: Detroit News