Editor’s note: To keep you as up-to-date as possible as we enter the final hours before the polls open, the Planet Waves editorial team will be posting last-minute changes in the political climateВ throughout the day.В
In a response to Saturday’s article on the GM/Chrysler merger, The International Herald Tribune has reported that GM’s request for bailout funds has been rejected. Read below for more details, and stay tuned.В –Rachel Asher
The Treasury Department has turned down a request by General Motors for up to $10 billion to help finance the automaker’s possible merger with Chrysler, according to people close to theВ discussions.
Instead of providing new assistance, the Treasury Department told GM on Friday, the Bush administration will now shift its focus to speeding up the $25 billion loan program for fuel-efficient vehicles approved by Congress in September and administered by the EnergyВ Department.
Treasury officials were said to be reluctant to broaden the $700 billion financial rescue program to include industrial companies or to play a part in a GM-Chrysler merger that could cost tens of thousands ofВ jobs.
But it remained unclear whether the officials were also seeking to avoid making any decision that would conflict with the goals of a new presidential administration. The Democratic candidate, Senator Barack Obama, has said in recent days that he supports increasing aid to the troubled auto companies, while Senator John McCain has not said whether he would support aid beyond the $25В billion.
While GM and Chrysler continue to talk, no deal is expected until the government clarifies its role, if any. Potential investors in the deal have been hesitant to back the merger without federalВ assistance.