NEW YORK (AP) - General Motors Corp. said Friday that it has
borrowed an additional $4 billion from the Treasury Department,
meaning the automaker has now accepted $19.4 billion in loans from
the U.S. government.
GM started taking government money in December and said it
intended to borrow $2.6 billion more by June 1 and an additional $9
billion after that. But in a regulatory filing Friday, GM said it
needed $1.4 billion sooner than originally forecast.
The company didn't publicly disclose how it will use the money
but said it provided the information to Treasury officials, and
they considered the loan acceptable.
"We appreciate President Obama's and his administration's
ongoing support of GM and the domestic U.S. auto industry as we
undertake the difficult but necessary actions to reinvent our
company," the company said in a written statement.
GM said it now expects to need $7.6 billion in loans after June
GM has until then to complete restructuring plans that satisfy
the government's auto task force, or else it will be forced to file
for Chapter 11 bankruptcy protection. The automaker has been
scrambling to cut labor costs, reduce its debt, shed dealerships
and brands, and close excess factories.
The company this week reached cost-cutting deals with Canadian
and U.S. unions that still have to be ratified by members, but GM's
unsecured bondholders have resisted an offer to take a 10 percent
stake in the company to wipe out $27 billion in debt. They say
that's too small a stake for the amount they are owed.
Analysts have said it's highly unlikely GM will get 90 percent
of its bondholders to agree to the offer, which is what the
government is requiring.
In addition to the $19.4 billion that GM has directly borrowed
from the government, its financial arm, GMAC Financial Services,
has received $12.5 billion in aid, plus GM received a $1 billion
loan to buy more equity in GMAC.
The government is also setting aside money to cover GM's
expected warranty costs as part of a program to assure car buyers
that their warranties will be honored regardless of what happens to