GM received $4b more from Treasury

May 23, 2009

, WASHINGTON, May 23 – General Motors said on Friday that it had received an extra four billion dollars from the US Treasury, bringing the total in emergency government loans to more than 19 billion dollars.

The ailing number one US automaker said it is using the funds to stay adequately capitalized as it prepares to present a viability plan to the government by the end of this month.

The higher-than-expected loan comes amid reports that the US government is preparing to steer the firm into bankruptcy by pushing the federal debt level to some 45 billion dollars.

Ahead of the end-of-month deadline the company has moved to reach cost-cutting deals with unions and to hive off some parts of its business.

On Friday, Canadian auto parts maker Magna International and Russia\’s Sberbank said they were prepared to invest 700 million euros to buy GM\’s Opel unit, leaving the US giant with just a 35 percent stake in the firm.

On Thursday the United Auto Workers union said it had reached a "tentative understanding" with the US Treasury and General Motors on contract changes, part of GM\’s scramble to get concessions to prove its viability.

In Canada on Friday the company reached a similar deal with the Canadian Auto Workers Union to reduce labour costs, part of joint US and Canadian government demands to make the company more competitive vis-a-vis Japanese and European car makers.

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