Despite emergency loan, automakers far from safe

— -- A $17.4 billion loan infusion from the Bush administration will keep General Motors and Chrysler on life support for three months, but the automakers' troubles are far from over.

President Bush's "bridge loan" plan, crafted after Congress failed to pass a bailout, provides enough help to plunk the problem on President-elect Barack Obama's doorstep.

"The Senate punted to the White House and the White House punted to the Obama administration," said Mike Jackson, CEO of AutoNation, the USA's largest auto dealer chain. "But without the bridge loans, it would have been lights out" for the auto giants.

The companies can get $4 billion more in February, if Congress releases the next $350 billion of the federal financial rescue fund.

They companies also were offered loans over the weekend by the governments of Canada and Ontario of $3.3 billion.

The U.S. loan plan requires the automakers to create by the end of March restructuring plans to become viable — or repay the loans immediately, which would likely force bankruptcy. The loan terms call for sacrifices by workers, creditors, shareholders, suppliers, dealers and others.

Privately held Chrysler's owner, Cerberus Capital Management, has offered to give up its entire equity stake to help the automaker restructure.

But the loan terms are negotiable, more so than if Congress had passed loan legislation.

"It's a good Band-Aid," says Aaron Bragman, analyst with IHS Global Insight. "But it's a $17 billion football Bush is tossing to Obama."

The Bush administration kept Obama's team informed, but they weren't asked to approve the plan.

Obama, however, did not indicate he would ease conditions. The companies "should seize on this opportunity over the next weeks and months to come up with a plan that is sustainable, and that means that they're going to have to make some hard choices," he said