President Bush recently announced that two of the giant US carmakers GM and Chrysler will be provided with US$13.4bn short-term loan from his administration. This money will come from the $700bn Troubled Asset Relief Programme (TARP), which is originally anticipated to provide financial institutions with emergency liquidity.

President Bush has said that the two carmakers will receive $13.4bn financial help to cover immediate liquidity alarm and another $4bn will be provided later. He also added that “The American people want the auto companies to succeed and so do I”.

Bob Nardelli, Chrysler’s chairman and CEO thanked Bush and said “A letter of intent was signed which outlines the specific requirements that must be achieved”. He also thanked the administration and treasury for their confidence in the company in his statement.

On the other hand, General Motor said, “We appreciate the president extending a financial bridge at this most critical time for the US auto industry and our nation’s economy.  This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depends on us. General Motor is already in a big financial crisis as they have only $14bn to launch with 2009.

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