Federal govt. gives GM additional $2B

May 18, 2009 9:43:42 AM PDT
Taxpayers invested another $2 billion in General Motors Corp. this week as the struggling auto giant continued efforts to restructure and avoid bankruptcy court. [CHECK THE MARKETS: Get the latest numbers from Wall Street]
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The Treasury Department said Friday it lent the additional money to GM on Wednesday to provide working capital. The loan pushes the total amount of GM's government aid to $15.4 billion after the company said it would need more money in the second quarter to stay afloat.

A government report revealed earlier this week that the Treasury was prepared to provide GM with up to $5 billion more in federal loans and Chrysler with up to $500 million more in bailout support as they race against deadlines to restructure.

GM has until June 1 to complete restructuring plans that satisfy the government's auto task force, while Chrysler has until Thursday to finish restructuring and ink an alliance with Italy's Fiat Group SpA.

GM, in a restructuring plan filed with the government in February, had said it would need $2 billion more in federal loans in March and another $2.6 billion in April. But last month Chief Financial Officer Ray Young said the company's expense cuts helped to hold off the need for the March installment.

GM CEO Fritz Henderson said last week that the automaker would need $4.6 billion during the second quarter.

In addition to the $15.4 billion, the automaker's financial arm, GMAC Financial Services, has received $5 billion in government aid, plus GM received a $1 billion loan to buy more equity in GMAC.

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