Both General Motors and Chrysler have now taken the first instalments of the USD$17.4 billion bridge loans made available by the US Government. Each manufacturer has now received $4 billion to keep the doors open while they prepare themselves for the uphill battle to return to profitability.
By February 17th, GM and Chrysler are required to have finalised and submitted strategies outlining how each plans to use the loan funds to ensure long-term viability. A government-appointed 'car czar' will then examine the plans in detail and, come March 31st, will decide if GM and Chrysler are on the right track. These findings may then affect the further availability of funds.
Ford you may remember, has secured its own finance and confirmed that it has enough in its coffers to ensure that operations will continue into 2010. Ford hopes to have righted the ship by then with a plan that involves its upcoming Fusion hybrid vehicle. Recent news of a large decline in US Hybrid sales won't help, but 2010 is a little ways off just yet.
While GM's future remains uncertain despite the massive cash injection, Chrysler is in even worse shape. It is going to be interesting tracking the progress of each of the troubled manufacturers and whether or not they can get things trending back into the black. It won't be easy in a desperately weak US economy. For us here, many will be watching closely to see what effect, if any, GM's US woes have on its Holden operation.
We'll be sure to update you when both manufacturers release their 'survival plans'.