GM asks U.S. government for funds to build hybrids
The Chevrolet Volt is seen during the Chicago Auto Show February 11, 2009.
Credit: Reuters/John Gress
DETROIT (Reuters) - General Motors Corp has asked for $2.6 billion of low interest government loans to support the development of three new hybrid vehicles, according to a business plan update released on Wednesday.
GM's loan request, which would help develop two spinoffs from its all-electric Chevrolet Volt, raises to $10.3 billion the aid it is seeking under a U.S. Energy Department program designed to support development of fuel-efficient vehicles.
The request for low-interest taxpayer backed loans was made on Monday to the U.S. Treasury Department, GM said. It was the automaker's third request for loans under the program.
It was also the first time GM has confirmed that it intended to move ahead with production of variants of the Volt, a battery-powered car that will carry a small, 1.4-liter engine as a generator designed to kick in after 40 miles.
The Volt, which is scheduled to go into production in late 2010, remains one of the most closely watched upcoming GM vehicles and has been central to the automaker's attempt to reinvent itself in the eyes of consumers.
In January, GM showed off a concept version of a Cadillac called the Converj, which was based on the electric-drive system the automaker has developed for the Volt.
GM executives have said the top U.S. automaker plans to use the Volt system in other models to raise volume and bring down the cost of the lithium-ion batteries the vehicles require.
The White House-appointed autos task force has given GM 60 days to come up with a restructuring plan that cuts costs and debt levels more deeply than the automaker had planned.
It was not immediately clear how that review process might affect GM's bid to secure the Department of Energy loans.
President Barack Obama has warned that GM may have to be restructured in bankruptcy if it fails to win sweeping concessions from the United Auto Workers union and bondholders.
Contingency plans for a GM bankruptcy developed by advisers would split the automaker into its more promising assets -- such as electric car technology -- while keeping lower-margin and loss-making operations under court-protection, a person with knowledge of the matter has said.
(Reporting by Kevin Krolicki; editing by Carol Bishopric)
