Detroit automakers General Motors and Chrysler have one last chance to deliver profitable business plans in order to continue receiving federal bailout funds.
The US government was in position to call in $17.4 billion in bailout loans that were granted to General Motors and Chrysler in December 2008 if the troubled automakers were unable to submit viable turnaround plans by February 17, 2009. As of June 1, 2009, General Motors has filed for bankruptcy protection as it seeks to rebuild itself.
The restructuring proposals were to include significant debt reduction and cost cutting measures to show the US government that the auto industry could survive without further federal funding.
Instead of submitting viable plans both Chrysler and GM asked the US government for more aid and announced significant job cuts, plant closures and project eliminations.
General Motors plans to lay off 47,000 workers, close five plants and reduce the number of brands to four; Chevrolet, Buick, Cadillac and GMC. The company will need at least another $16.6 billion in government funding to reach viability by 2017.
Chrysler is in slightly better shape than GM, asking the US government to loan it an additional $5 billion dollars to see it through the next three years.
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