Automaker General Motors has received another $US2 billion in government loans from the US Treasury to help sustain it as it continues battling for survival.
Payment was made on Wednesday, providing the company with more working capital and allowing it to keep operating until a government-mandated June 1 deadline, when GM must submit a new restructuring plan.
Previous proposals were rejected by the Obama Administration in March, forcing GM to instigate a series of severe cost-cutting measures as it races against time to avoid bankruptcy.
The government has pressured GM to dump a number of its less-profitable brands in exchange for more loans, prompting the company to put Saturn, Saab and Hummer up for sale, while Pontiac too may fall victim to restructuring.
While GM has picked up $US13.4 billion in loans prior to this latest announcement, rival manufacturer Chrysler LLC is reportedly to receive a further $500million through to the end of this month on top of the $US4 billion in loans it has received over the past few months.
Meanwhile, Chrysler?s lenders have reportedly responded to the Treasury?s offer of $US1.5 billion and a five percent holding in the company in exchange for $US7 billion in debt, a move that should alleviate some of its financial burden.
However, bankruptcy still remains a real possibility for Chrysler unless it can provide a solid restructuring proposal by May 1, and complete its merger with Italian car maker FIAT. Time is quickly running out.