By Mark Huffman
ConsumerAffairs.com
April 21, 2009
Chrysler and General Motors are getting more money from U.S. taxpayers to help the two companies reorganize without declaring bankruptcy. The Obama Administrations says it will provide $500 million to Chrysler and $5 billion to GM through the end of this month.
An independent group overseeing the Treasury Department's corporate rescue effort said in a report the money is needed to help the two companies take the steps directed by the White House at the end of last month.
Chrysler will reportedly use its latest cash infusion to help bring about a merger with Italian carmaker Fiat. The White House last month, after reviewing and rejecting Chrysler's plan for turning itself around, said a merger was the only way the carmaker could stay in business.
General Motors, meanwhile, is attempting to go through a bankruptcy without actually declaring bankruptcy. The company is attempting to restructure it organization and renegotiate service, labor and supplier contracts.
The United Auto Workers have thus far declined to renegotiate its current contract with GM, though it has signaled a willingness to make accommodations on future agreements. The union this week urged its members to bring pressure on the White House to protect their interests in the two corporate reorganizations.
There are 62,000 UAW members employed at GM and 26,000 at Chrysler.
Besides the union, GM and Chrysler are also seeking concession from investors who hold their corporate bonds.
