GM gets another $2 billion in taxpayer loans

WASHINGTON -- The Treasury Department says it has provided General Motors with more money as the giant automaker struggles to restructure. The Treasury said the payment was made Wednesday and provides working capital.

Meanwhile, with a government-imposed deadline for restructuring less than a week away, Chrysler and Treasury Department officials are still holding out hope they can reach deals to keep the automaker out of bankruptcy courts.

Chrysler is living on $4 billion in government loans and could get another $500 million in temporary financing. Chrysler must take on Fiat Group as a partner, cut debt and reduce labor costs by Thursday if it wants another $6 billion.

A government report revealed earlier this week that the Treasury was prepared to provide GM with up to $5 billion more in federal loans and Chrysler with up to $500 million more in bailout support as they race against deadlines to restructure.

GM has until June 1 to complete restructuring plans that satisfy the government's auto task force, while Chrysler has until April 30.

Absent completed deals, the Obama administration has said it won't lend any more money, and without more cash, Chrysler almost certainly would be auctioned off in pieces under court supervision.

As talks continue, Chrysler and the Treasury Department are preparing bankruptcy filings, one as a reorganization in Chapter 11 with government funding and the other as a liquidation if no government money is available, two people briefed on the talks said Friday.

Both spoke on condition of anonymity because the fast-moving negotiations are private.

The Canadian Auto Workers union said Friday it is close to a cost-cutting deal with Chrysler, and one of the people said the company also is nearing an agreement with the United Auto Workers in the U.S.

Under that deal, the union would take equity in the company for part of the $10.1 billion Chrysler must pay into a union-run trust that will take over retiree health care costs starting next year. Due to the size of the investment, the UAW could become the automaker's biggest shareholder.