GM borrows $4 billion more from US government

May 23rd, 2009 - 11:41 am ICT by IANS  

New York, May 23 (DPA) Ailing automotive giant General Motors Corp on Friday borrowed another $4 billion from the US Treasury Department, boosting its total government aid to $19.4 billion.
GM had earlier forecast it would need an additional $2.6 billion of government loans before June 1, but said in a government filing that it now needed $1.4 billion more beyond that initial estimate.

As a result, the carmaker decreased its estimated need for government aid after June 1 to $7.6 billion from an earlier figure of $9 billion.

The company is racing to meet a government deadline for GM to restructure its operations and settle outstanding debt with its creditors, or be forced into bankruptcy. The biggest hurdle for the carmaker remains striking a deal with creditors who are owed some $27 billion.

Media reports have said GM is preparing bankruptcy filings. Its smaller rival Chrysler LLC has already entered bankruptcy.

On Thursday, GM reached a deal with the United Auto Workers Union to modify its labour contract and retiree healthcare plan. Last week, GM announced massive cuts in its dealership network as part of a drastic effort to cut costs and survive the global recession.

GM informed 1,100 of its nearly 6,000 dealers that their contracts will not be renewed. GM is also working to off-load its Saturn, Hummer and Saab brands, which will further reduce its network. Three firms Wednesday lodged bids to acquire the Opel brand.

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