GM, Chrysler face bailout deadline

GM CHRYSLER BAILOUT DEADLINE (Added: February 17, 2009)

Looking for more money from the federal government, Chrysler and General Motors had to explain Tuesday why they should get the loans and how they plan to use the funds. (more)

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By NBC
Published: February 17, 2009

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Looking for more money from the federal government, Chrysler and General Motors had to explain Tuesday why they should get the loans and how they plan to use the funds.

The sputtering auto makers tried to explain to regulators how they hope to get back on the road to recovery.

As a condition of their bailout Chrysler and General Motors were required to submit a plan to Treasury officials outlining how they will re-establish a viable business and repay the government loans.

Chrysler has already borrowed $4 billion, GM $9.4 billion and is expected to cash in on another $4 billion in federal funds.

"They are doing all the things a company does when they are in bankruptcy. They are trying to restructure their debt, they are trying to restructure to force concessions on labor," noted the Wall Street Journal's John Hilsenrath. "They are turning to the government for what is effectively debtor in possession financing, so we are already there."

Still some analysts say it is important, even if it is is only semantics, that the Big Three stay out of Chapter 11.

Contentious negotiations with debt-holders and labor continue to move slowly.

GM had hoped to reach a deal with the United Auto Workers Union by Tuesday's deadline, but that did not happen, despite all night talks.

Many believe concessions from the uaw are the key to keeping the industry's engine running.