Accessibility links

Struggling US Automakers Can Apply for Government Loans


Some long-promised help is finally available to the so-called "Big Three" U.S. automakers.

U.S. government officials said Thursday General Motors, Ford Motor Company and Chrysler can now apply for $25 billion in loans.

Congress approved the program last month, but the U.S. Energy Department only set out rules for participation late Wednesday night. The loans are limited to projects designed to produce more fuel-efficient vehicles.

Auto company executives and the president of the United Auto Workers union will push for billions more when they meet today with House Speaker Nancy Pelosi. The U.S. automakers and their supporters have been asking for government help for the industry, devastated by declining sales.

Some economists have warned that high oil prices and the global credit crunch could push some carmakers into bankruptcy.

The governors of six U.S. states and some industry groups said even if one of the car companies fail, the U.S. could lose millions of jobs because of the impact on companies tied to the auto industry.

U.S. auto sales plunged by more than 30 percent in October in their lowest levels in almost two decades.

GM has been lobbying President George Bush for $10 billion to facilitate a merger with Chrysler, the country's third largest automaker.

President-elect Barack Obama is supporting a proposal to double the Energy Department loan to $50 billion. Mr. Obama promised during the presidential campaign to give the U.S. auto companies help as they make the transition from fossil fuels to newer and cleaner technologies.

Some information for this report was provided by Reuters.


XS
SM
MD
LG