Ford says no as GM and Chrysler wait

  • Ford rejects state funding
  • Chrysler and GM wait on £10.1 billion
  • Senate unlikely to approve bail-out
Ford is reported to have broken ranks with Chrysler and GM by turning down US Government funding.

The strict conditions attached to the federal loan are so restrictive that Ford’s bosses are doing everything they can to avoid taking the state-funded bail-out package.

'Ford is a company trying to pull itself up by its own bootstraps, and making it on its own and pulling the right levers', executive chairman Bill Ford Jr. told reporters.

Unlike Chrysler and General Motors, Ford has only ever asked for a line of credit, which it would be able to access if the economic conditions worsen.

Meanwhile, Chrysler and General Motors face more delays in their efforts to secure the $15 billion (about £10.1 million) bail-out loan from the US Government.

Although the House of Representatives has approved the aid package, a significant number of Republicans are reported to be ready to vote against it when it goes to the Senate.

Supporters of the loan say it is crucial to safe-guarding the future of the car makers and thousands of US jobs.

Critics say that the money should not be given to commercial organisations, and that it will merely be used to prop up companies that are inherently unsound.

If approved, the $14bn loan would be for seven years, payable at 5% interest for five years and 9% for the remaining two.

In exchange for the money the car makers will also agree to be regulated by a 'car tsar', who would be appointed by the US Government and would need to approve any spending over $25 million.

At least one of the three car makers is reported to be heading for bankruptcy before the end of the year if the funding deal is not approved.
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