FACTBOX: Key elements of White House auto rescue
(Reuters) - The White House announced a $17.4 billion government loan program on Friday to bail out ailing U.S. carmakers.
The government will make available $4 billion to Chrysler LLC and $9.4 billion to General Motors Corp in December and January. The government expects both companies to seek access to the loans immediately.
GM would get an additional $4 billion in February.
The White House said Ford Motor Co does not believe it needs a loan right now. The company, which says it has adequate near-term liquidity, would like a line of credit in case its finances worsen in 2009.
KEY ELEMENTS:
* Most of the money will come from a $700 billion fund originally dedicated to rescuing struggling financial institutions.
* Loans would be called back if the automakers cannot prove they are viable by March 31.
* Viability defined as positive net present value, accounting for all current and future costs, and ability to fully repay loans.
* In exchange for loans, companies must provide warrants for nonvoting stock to the government; they must accept limits on executive compensation and eliminate perks such as corporate jets.
* Debt owed to the government would be senior to other debt to the extent permitted by law. Companies must allow the government to examine their books and records.
* Companies must report and the government has the power to block any transactions greater than $100 million.
* Companies must comply with applicable federal fuel efficiency and emissions requirements.
* They must conclude new agreements with major stakeholders, including dealers and suppliers, by March 31, 2009.
TERMS THAT CAN BE NEGOTIATED:
* Reduce debt by two-thirds via a debt-for-equity exchange.
* Make half of VEBA health-care trust payments in the form of stock.
* Eliminate United Auto Workers union jobs bank, which pays laid-off workers, sometimes for years.
* Make wages and work rules competitive with transplant auto manufacturers by December 31, 2009.
(Editing by John Wallace and Jeffrey Benkoe)
