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WASHINGTON (CNN) -- The federal government will provide $13.4 billion in loans to Detroit automakers, the White House said Friday.
President Bush said Friday morning automakers must show they can be profitable businesses by March 31.
President Bush said Friday morning automakers must show they can be profitable businesses by March 31.
"Allowing the U.S. auto industry to collapse is not a responsible course of action," President Bush said Friday morning.
"The terms and conditions of the financing provided by the Treasury Department will facilitate restructuring of our domestic auto industry, prevent disorderly bankruptcies during a time of economic difficulty, and protect the taxpayer by ensuring that only financially viable firms receive financing," according to a statement released by the White House.
An additional $4 billion may be available in February, the Bush administration said.
The loans are designed to stabilize U.S. automakers through March 2009, at which time the automakers must show they are financially viable.
"If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury," the statement says.
Financing will be drawn from the $700 billion Troubled Asset Relief Program, it says.
The president said Friday the plan will give the automakers a chance to show they can be viable outside a "disorderly bankruptcy" which he said would drive American into a deeper depression with effects "far beyond the auto industry."
The government will put other conditions on the loans, Bush said Friday, including making pay competitive with foreign automakers with large U.S. operations such as Toyota and Honda. Employees of foreign automakers generally make less than those in U.S.-owned plants.
The plan also puts limits on executive compensation and perks such as corporate jets, requires the automakers to adhere to fuel efficiency and emission standards and open books to government scrutiny.
Chrysler Chairman and CEO Bob Nardelli thanked the administration for the loan.
"A letter of intent was signed which outlines the specific requirements that must be achieved," Nardelli said in a statement. "These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these
President Bush said Friday morning automakers must show they can be profitable businesses by March 31.
President Bush said Friday morning automakers must show they can be profitable businesses by March 31.
"Allowing the U.S. auto industry to collapse is not a responsible course of action," President Bush said Friday morning.
"The terms and conditions of the financing provided by the Treasury Department will facilitate restructuring of our domestic auto industry, prevent disorderly bankruptcies during a time of economic difficulty, and protect the taxpayer by ensuring that only financially viable firms receive financing," according to a statement released by the White House.
An additional $4 billion may be available in February, the Bush administration said.
The loans are designed to stabilize U.S. automakers through March 2009, at which time the automakers must show they are financially viable.
"If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury," the statement says.
Financing will be drawn from the $700 billion Troubled Asset Relief Program, it says.
The president said Friday the plan will give the automakers a chance to show they can be viable outside a "disorderly bankruptcy" which he said would drive American into a deeper depression with effects "far beyond the auto industry."
The government will put other conditions on the loans, Bush said Friday, including making pay competitive with foreign automakers with large U.S. operations such as Toyota and Honda. Employees of foreign automakers generally make less than those in U.S.-owned plants.
The plan also puts limits on executive compensation and perks such as corporate jets, requires the automakers to adhere to fuel efficiency and emission standards and open books to government scrutiny.
Chrysler Chairman and CEO Bob Nardelli thanked the administration for the loan.
"A letter of intent was signed which outlines the specific requirements that must be achieved," Nardelli said in a statement. "These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these