General Motors Company (GM) has applied for more than $10 billion in Department of Energy funds, according to a spokesman for the company. Such loans would further extend the taxpayer commitment to GM's reorganization. The Treasury Department has already committed at least $50 billion in direct bailout funds to GM, and billions more to its affiliates, such as supplier Delphi Corp. and lender GMAC LLC through the Troubled Asset Relief Program.The DOE has thus far withheld putting funds into GM because of the auto maker's bankruptcy and financial troubles. Securing those funds are a component of GM's shorter-term liquidity assumptions and is factoring into its plans in order to meet its capital requirements in the future.
The DOE has offered as much as $25 billion in assistance to auto makers trying to build and develop more fuel-efficient products. Ford Motor Company and other auto makers have been granted such funds, even though GM and Chrysler have not due to concerns related to those companies' viability.
The government's new "cash for clunkers" program is fueling hopes that it will generate enough interest to lift auto sales. According to the Department of Transportation, nearly 16,000 auto dealers signed up to participate in the program since Friday, the first day that the government made available cash vouchers for trading in old cars for more fuel-efficient ones. (WSJ, 7/27/09)
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