David M. Herszenhorn, Bill Vlasic and David E. Sanger
The New York Times
Thursday, Dec 18, 2008
The White House and the Treasury are deep into negotiations with General Motors and Chrysler over reorganization plans that could result in freeing up more than $14 billion in emergency loans to keep the companies afloat through the first quarter of 2009, according to industry executives and a senior administration official.
The Bush administration appears to want an agreement with the automakers before Dec. 25. It was unclear, however, when all of the particulars might be worked out, said the senior official, who spoke on the condition of anonymity because of the delicate nature of the negotiations.
But the official indicated that the administration was inclined to do more than just keep G.M. [GM 4.13 -0.24 (-5.49%) ] and Chrysler alive until President-elect Barack Obama takes office, saying, “Giving them enough money to limp along doesn’t solve anything.”
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In the negotiations, the Treasury secretary, Henry M. Paulson Jr., is effectively taking on the role of “auto czar,” which was envisioned in the carmakers rescue bill written by the White House and Congressional Democrats and approved by the House but blocked by Senate Republicans.
In the days since the White House said it would step in to prevent the collapse of G.M. and Chrysler, Treasury officials have been poring over detailed financial data in a meticulous exercise that one G.M. executive likened to “putting on the aqualung” and diving deep into the companies’ books.
G.M. officials said that the company’s chief financial officer, Ray Young, and a team of aides had provided the Treasury with a vast sheaf of documents including supplier contracts and payment schedules, production plans, employee payrolls, debt obligations, interest payments and even utility bills.
The negotiations continued on Wednesday even as Chrysler announced that it would idle all of its factories for a month or more, extending an annual holiday shutdown that normally lasts about two weeks. Chrysler’s finance arm also warned dealers on Wednesday that a shortage of cash might force it to stop making loans temporarily that many dealers rely on to buy inventory for their lots.
This article was posted: Thursday, December 18, 2008 at 12:00 pm