WASHINGTON (Reuters) - The finance arms of ailing U.S. automakers such as General Motors Corp and Chrysler could apply for help from the $700 billion financial rescue package, the White House said on Monday.
Automakers have seen sales plunge as the credit markets have dried up, making it difficult for buyers to obtain loans for new vehicles. GM and Chrysler have been discussing a merger and also have been slashing jobs and closing plants to cut costs.
“The automakers do have financing arms, many of them do,” said White House spokeswoman Dana Perino. “And it’s possible that some of those financing arms could be a part of the rescue package, the TARP, as they call it, at the Treasury Department.”
She was referring to the Treasury Department’s $700 billion Troubled Asset Relief Program (TARP) which was initially promoted to Congress as a way to get bad assets off of lenders’ books and restore the flow of credit.
The administration has already tapped the fund to buy stakes in banks.
“If those companies apply for that, it’s possible that they could be included in it, but I’d have to refer you to Treasury for details, because they would analyze whether or not they qualify,” Perino said.
Congress last month approved $25 billion in low-interest loans to the automakers to help them meet new federal fuel efficiency requirements, but complaints have poured into the administration that it was taking too long to set them up.
“We’re working as quickly as we possibly can to get those regulations finalized to be able to provide that,” Perino said, referring to regulations being drawn up for the loans by the Department of Energy. She denied those loans were stuck.
In recent days senior lawmakers have been pressuring the administration to take dramatic steps to help the ailing industry.
Reporting by Jeremy Pelofsky, editing by Derek Caney, Susan Kelly, Richard Chang