WASHINGTON – The struggling domestic automatic industry received a temporary reprieve today when the Bush administration announced a $17.4 billion loan package.
The government will make $13.4 billion in loans available to Chrysler and General Motors immediately and additional funds next year if the companies are deemed financially viable then.
If the companies can't prove they are financially viable by March 31, they would be required to return the funds.
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"These are not ordinary circumstances, in the midst of a financial crisis and a recession allowing the US auto industry to collapse is not a responsible action," President Bush said at the White House.
Under the plan, the companies must reduce their debt obligations and renegotiate their contracts with the United Auto Workers so wages and benefits are at the same level as those of employees of foreign-based automobile manufacturers in the United States.
Ford has said that they don't need loans at this time but would like guarantees in case they need help in the future.
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