Big Three, Bailouts | featured news

Automaker will repay $6.7B in taxpayer-funded loans by end of June, new chief executive says.

The deal between General Motors and the Obama administration solves a problem that could have troubled the company’s plan for quick restructuring.

The government is poised to disclose that Ford, Tesla and Nissan will be among the first beneficiaries of a $25 billion loan program to help develop fuel-efficient vehicles.

The government will likely hold a large share of G.M. after it emerges from bankruptcy, and the union will hold 17.5 percent through its health fund.

With a bankruptcy filing by Chrysler appearing all but certain, President Obama will address the fate of the automaker at noon.

Chrysler’s unsecured creditors have reached a preliminary deal with the Treasury Department, two people briefed on the matter said on Tuesday.

General Motors Corp. said it will cut 21,000 U.S. factory jobs by next year, phase out its storied Pontiac brand and ask the government to take more than half its stock in exchange for half of GM's government debt as part of a major restructuring that would leave current shareholders holding just 1 percent of the company.

General Motors (GM) has received another $2bn (£1.4bn) in loans from the US Treasury, it has been announced.

The Obama administration remains focused on bringing Chrysler and Fiat into a working partnership, a U.S. official said on Thursday, dismissing a news report that the U.S. car-maker faced imminent bankruptcy.

General Motors Corp. will not make a $1 billion debt payment due June 1, its CFO, Ray Young, told reporters on Wednesday. Instead, it is hoping to complete a debt-for-equity exchange or be forced to resort to bankruptcy.

GM's stock plummeted on the news.