Chrysler, burning through cash as sales slide, has received US$4 billion ($6.8 billion) in an initial loan from the US Treasury to help stave off a collapse that could worsen a recession.
Chrysler, based in Auburn Hills, Michigan, completed talks with the Treasury and got its initial payment,according to a company statement.
Chrysler, the third-largest US carmaker, might have run out of operating cash by the middle of the month without the aid. Management is now under pressure to restructure the company into a business that can survive in the long run.
The loan to Chrysler is part of a US$17.4 billion aid package for Chrysler and General Motors announced on December 19. "This initial loan will 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," chief executive Robert Nardelli said.
GM received an initial US$4 billion in rescue funding from the Government on December 31 and may get up to US$13.4 billion in total. Chrysler was promised US$4 billion in loans. GMAC, GM's lending arm, got a US$6 billion cash infusion from the Government earlier last week after the credit crunch limited its ability to make loans to customers.
Ford, whose US sales declined 19 per cent last year through November, says it has enough cash to make it through this year.
