The auto bailout helped to keep GM and Chrysler on life support, but GM will make it clear in it’s plan to be filed this week with the government that more money will be needed in order to avert bankruptcy.
General Motors Corp. will offer the government the choice of giving it billions more in bailout money or seeing it file for bankruptcy when it presents a restructuring plan next week, according to a report published Saturday.
The online edition of The Wall Street Journal, citing unnamed sources, said the competing choices present a dilemma for the Obama administration, which may fear seeing the industrial icon carmaker fall into bankruptcy and cut more jobs if it’s refused more aid.
The government has already committed $13.4 billion to GM as part of a federally-funded bailout. The automaker is expected to include its call for more funds in a restructuring plan it’s required to submit to the Treasury Department by Tuesday, though the company isn’t expected to include a dollar amount, according to the Wall Street Journal report.
However, Treasury Department officials believe GM needs at least $5 billion more in loans to keep operating beyond the first quarter, according to the report.
The key will be the plan laid out by GM. Will it have real concessions from bondholders and the union?