Feds May Loan GM $5B for Chrysler Deal

By Neal Colgrass,  Newser Staff
Posted Oct 27, 2008 7:16 PM CDT
General Motors sign is seen through a fence at an auto plant in Arlington, Texas, Tuesday, July 15, 2008. GM has announce job cut due to a slowdown in sales.   (AP Photo/LM Otero)
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(Newser) – Federal aid may be on the way to facilitate a GM-Chrysler merger, the Wall Street Journal reports. The Department of Energy aims to loan General Motors $5 billion so the merged company can afford layoffs, plant closings, and other integration costs. It could also help GM drum up more investment cash; it needs about $10 billion to make the merger work.

The Energy Department hopes to draw the dollars from a $25 billion pool of low-interest loans, originally approved by Congress to help automakers meet new fuel-efficiency standards. The White House said today "it's a possibility" that Big Three automakers could get loans from the $700 billion bailout plan, but Treasury officials later called on the Energy Department to foot the bill.