Chrysler receives $4 billion from US treasury news

The ailing Detroit automaker, Chrysler said today that has received the $4 billion loan from the US government as agreed by the US Treasury last month in order to save it from an imminent collapse and the money will be used to pay its suppliers, wages and other operating expenses. The Bush administration had offered to use an unused part of the first tranche of the financial sector bailout package to help GM and Chrysler stave off collapse due to credit problems and dismal sales after the US Senate vetoed bailing out the automakers.Last month the Bush administration bailed out General Motors and Chrysler with $17.4 billion in emergency loans of which $13.4 billion came from the unused portions of the nearly exhausted $335 billion of the first part of the $700-billion economy bailout package and the remaining to come from the second $350-billion which has to be approved by the US Congress. GM will get $13.4 billion and Chrysler the remaining $4 billion under the plan worked out by the carmakers and the treasury. Chrysler chief executive Bob Nardelli said in a statement that the initial loan would "allow the company to continue an orderly restructuring, while pursuing our vision to build the fuel-efficient, high-quality cars and trucks people want to buy." Chrysler, which is 81 per cent owned by private equity firm, Cerberus Capital Management and 19.9 per cent by Daimler, had only $2.5 billion in cash reserves and was putting off paying its parts suppliers and other vendors who were asking for cash payment. Although GM received its $4 billion loan on 31 December 2008.