The Presidential Task Force’s decision to brand Chrysler and GM as financially unviable means that neither company can receive funds from the Department of Energy’s fuel-efficient vehicle loan program.
According to the laws that decide who can receive loans from the program, only companies that are “financially viable” are eligible to get money. Last week, the task force on autos dubbed both GM and Chrysler financially unviable, threatening both automakers with bankruptcy.
The Department of Energy has $25 billion to distribute. It is currently sorting through applications, and Energy Secretary Steven Chu has said that the loans would start being allocated by May. Chrysler had applied for $6 billion, and GM for $10.3 billion.
Ford has asked for about $11 billion. It would be the only Detroit automaker to receive funds if the Department of Energy granted its request.
Stephanie Mutter, a spokeswoman for the department, said Department of Energy officials were working closely with the Treasury, and that while the department could not comment on individual applications, the Treasury’s decisions on financial stability would stand.
GM spokesperson Kerry Christopher confirmed that the automaker could not receive any loans. “They can’t give us the additional loans until all other issues are worked out,” Christopher said.
Source: The Detroit Free Press