FordBuyer Posted January 1, 2009 Share Posted January 1, 2009 General Motors gets first tranche of US loan Wednesday December 31, 7:11 pm ET By Kimberly S. Johnson, AP Auto Writer General Motors receives first $4 billion tranche of federal loan DETROIT (AP) -- General Motors Corp., received its first multibillion dollar loan installment from the U.S. Treasury Department Wednesday night, right in time to avert a financial disaster in which the struggling automaker may have been unable to sustain operations and pay suppliers. "Treasury today finalized the loan transaction for GM and funded the first tranche of $4 billion," said Treasury spokeswoman Brookly McLaughlin in a written statement. The funds are the first portion of $9.4 billion in low-cost loans that GM is expected to receive from the government. The Detroit automaker had been working feverishly with Treasury officials to close on the first loan installment. The money will be available for GM to use almost immediately. The cash-strapped Detroit company plans to use the money for continuing its operations. GM is obligated to a make a large payment to a major supplier in early January, but has declined to offer details on the amount of money it owes or to which supplier. The loans come from the $700 billion bank rescue plan, approved by Congress in September. President Bush said earlier this month that the ailing automakers could tap part of those funds in the form of low-interest loans. GM is burning through approximately $33 million a day, based on spending $1 billion per month during the third quarter. That daily amount is likely lower for the fourth quarter as GM has reduced spending on operations, sponsorships, utilities and even office supplies. GM previously said it might not make it through the end of the year before running out of cash without government aid. Auburn Hills, Mich.-based Chrysler LLC is expecting $4 billion in cash as well, but the Treasury has yet to announce the closing of the first round of loan money. "We're working expeditiously with Chrysler to finalize that transaction and we remain committed to closing it on a timeline that will meet near term funding needs," McLaughlin said. Chrysler is nearing the minimum level of cash -- $2.5 billion -- it needs to operate. Chrysler is already fending off angry parts suppliers and other vendors demanding cash payments on delivery. It generally pays suppliers $7 billion every 45 days. Dearborn, Mich.-based Ford Motor Co. said it does not intend to use government money to fund operations, as it is in a better financial position than its competitors. The Detroit automakers are trying to weather the biggest auto sales slump in more than 26 years. Quote Link to comment Share on other sites More sharing options...
simplesituations Posted January 1, 2009 Share Posted January 1, 2009 Dearborn, Mich.-based Ford Motor Co. said it does not intend to use government money to fund operations, as it is in a better financial position than its competitors. Still have to throw Fords name in there just for association Quote Link to comment Share on other sites More sharing options...
TomServo92 Posted January 1, 2009 Share Posted January 1, 2009 Still have to throw Fords name in there just for association Meh...it's not that bad. Quote Link to comment Share on other sites More sharing options...
Noah Harbinger Posted January 1, 2009 Share Posted January 1, 2009 Did the OP perhaps mean to say "on the dole"? Quote Link to comment Share on other sites More sharing options...
FordBuyer Posted January 1, 2009 Author Share Posted January 1, 2009 Did the OP perhaps mean to say "on the dole"? No, dope as in addiction and can't get off. GM is now addicted to federal money and as if that is not bad enough, there are ropes attached that will greatly consrict their independance. Ford needs to do anything possible to stay off this dope. Hopefully Ford had a decent sales month as it looks like it to me and obtains much needed revenue. Quote Link to comment Share on other sites More sharing options...
jpd80 Posted January 1, 2009 Share Posted January 1, 2009 (edited) Easy financing is addictive, GM and Chrysler will be back for more and more. Ford is now clearly two to three years in front of the other two an has a golden opportunity to wrench back a lot of lost market share while GM and Chrysler pander to the government. Ford has timed its new products run perfectly, hitting the market when the others are reorganizing. GM and Chrysler will watch and wonder how Ford did it, that's the big difference!!! Edited January 1, 2009 by jpd80 Quote Link to comment Share on other sites More sharing options...
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