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Government Gives More Aid to GM and Chrysler

April 21, 2009

WASHINGTON – The Obama administration set aside $500 million to help Chrysler LLC get through April, as it seeks to reach an alliance with Fiat, Reuters reported. It also set aside up to $5 billion through May to help General Motors Corp. restructure outside of bankruptcy, an independent oversight report on the Treasury Department's corporate rescue fund said Tuesday.

The administration's task force is helping Chrysler broker meetings this week in Washington and Detroit to see if a deal with Fiat is possible.

The administration has also offered up to $6 billion to help finance the alliance that would give Chrysler access to Fiat's small car technology, and the Italian automaker a platform for building light trucks and a robust network for selling its vehicles in the United States.

GM said on Monday it would cut another 1,600 salaried jobs by May 1. The reductions are part of GM's plan to slash its global salaried work force this year by about 10,000, or 14 percent. GM also aims to cut 37,000 hourly jobs worldwide by the end of the year.

Separately, the United Auto Workers (UAW) union urged its 88,000 members to lobby the White House to ensure that workers and retirees are treated fairly in negotiations at both companies on new concessions, which are considered vital for the automakers' to survive.

The union is under pressure along with bondholders and banks to help Chrysler and GM slash debt so they can restructure. The central issue for the UAW and the car companies is reaching an accord on restructuring the finances of a multi-billion-dollar retiree health care trust.

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