US car-makers told to justify bail-out

General Motors, Ford and Chrysler have been told to show they have a “viable recovery plan” in order to get a $25bn (£17bn) bail-out from the US government. The car manufacturers have until December 2 to present plans.

The companies’ plea for money has been given support across the US government, with the President George W Bush thought to favour the deal, but the leaders of both houses of Congress have said there will no money unless the companies can show that it will make a significant difference.

A bipartisan deal suggested using a $25bn (£17bn) energy department loan, which was originally earmarked for developing fuel-efficient vehicles, to help shore up the companies. GM has already said it will run out of cash next year if it does not receive help.

The chief executives of the three companies appealed to two congressional committees earlier this week, claiming that millions of jobs will be lost if they do not receive help.

GM and Ford have both been forced to freeze marketing and advertising spend as they struggle to deal with the tough economic climate.