• Washington Post , Friday, December 19, 2008 11:15 AM

In return for an extensive restructuring of its outstanding debt and labor costs, U.S. automakers will receive emergency loans of up to $17.4 billion from the federal government, President Bush says. The federal aid is meant only to keep them afloat while the companies decide how to restructure and prove that they can become viable, according to the president. He set a March 31 deadline.

Funds for the loans will come from the Troubled Asset Relief Program initially set up to aid the financial industry, with $13.4 billion available now and an additional $4 billion available in February, David Cho, Steve Mufson and Howard Schneider report.

The White House will not appoint a "car czar" to oversee the industry going forward, but the companies will have to restructure their wage and benefit agreements so that by the end of 2009 they are competitive with foreign automakers that have plants in the U.S. Other conditions of the loan include a federal review of any transaction over $100 million, limits on executive compensation, and a cap on new dividends to stockholders.

Read the whole story at Washington Post »