Steven Rattner, the US Treasury’s chief auto adviser, has said this morning that both Chrysler and GM might need “considerably” larger loans.
Mr. Rattner said these loans would be in addition to the extra US$21.6 billion of added funds the car manufacturers have already requested.
Mr. Rattner went on to say Chrysler and GM’s turnaround plans are “somewhat ambitious” and probably “optimistic”.
US President Barack Obama is said to be using his automotive task force to help him decide whether to push go ahead with further loans, or force the manufacturers into bankruptcy. We will know more on this decision by March 31st.
GM CEO Rick Wagoner warned his company could be forced into bankruptcy if negotiations with the UAW and debt-holders fail. Rattner said he might have to set a deadline for the negotiations to end to expedite the process if the manufacturers could not be seen to do so alone.
“Part of why there’s a lack of appearance of movement is nobody wants to go first,” Rattner said. “You say here’s the deadline, everybody has to get there by this date or we’re going to do something else. In the course of what we say over the next 10 days, we will make very clear what the timetable is, by when it has to happen by, and also what we expect from them.”
To date, the two manufacturers have received US$17.4 billion in financial support.