WASHINGTON -- General Motors on Wednesday received the first $4 billion in emergency loans that the federal government has promised the automaker.
Both GM and Chrysler had been scheduled to receive on Monday, Dec. 29, $4 billion from a total of $17.4 billion in federal loans the Bush administration offered to extend after the companies warned they are close to running out of cash.
Treasury Department spokewoman Brookly McLaughlin, in an e-mail Wednesday evening to reporters, said, Were 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.
Chrysler said it remained in talks with the U.S. Treasury to finalize its own $4 billion loan agreement and expected to receive its share of the funding soon.
"The discussions relating to Chrysler have been positive and productive and we look forward to finalizing the details of our financial assistance in the immediate future," Chrysler spokeswoman Shawn Morgan said in a statement.
GM spokesman Greg Martin said his company and the Treasury closed on the government loan at about 4:30 p.m. Wednesday, and GM subsequently received confirmation of the transfer of $4 billion from the federal government.
The Bush administration has promised another $9.4 billion for GM early next year. The final $4 billion of that amount will require congressional action.
The Treasury Department this week also approved $6 billion in aid for automotive lender GMAC and has signaled a willingness to help those suppliers whose shutdown would bring automakers to a halt.
Automakers receiving emergency loans must file plans by Feb. 17 describing how they will restructure to become viable for the long term. Unless agreements are changed by the Obama administration, a president's designee, or car czar, is to decide by March 31 if an automaker's restructuring plan is sufficient. If not, the first loans will be called in, possibly forcing the company into bankruptcy.
Ford Motor Co. is not seeking an emergency loan but wants to be able to tap a $9 billion government line of credit if necessary.
Together the Detroit 3 CEOs told lawmakers early in December they need access to at least $34 billion from the government to get through the extreme economic downturn.
Some analysts and economists say much more government help will be needed.
Reuters contributed to this report
GM's formal statement is as follows:
GM has received the first tranche of $4 billion from the federal government and looks forward to working with the government on all elements of the loan agreement and our viability plan.
We appreciate the administration extending a financial bridge to GM at this critical time for the U.S. auto industry.
GM remains committed to providing great cars, trucks and crossovers, as well as leading technologies, to our customers. We are committed to successfully executing the viability plan we submitted on Dec. 2 and remain confident in the future of General Motors.