The US Congress has agreed in principle to a $15bn (£10bn) bailout loan to help rescue General Motors and Chrysler. The US House of Representatives will vote on the bill later today.
It has also made an additional $9bn (£6bn) could be made available for Ford but the company has opted not to take a loan at this stage.
The bill is due to be sent to the US Senate for approval tonight (December 10) by the House, and funds could be made available as early as Saturday (December 13). President George W Bush has already approved the loan.
The bailout is designed to allow GM and Chrysler to avoid bankruptcy proceedings, while they initiate cost-saving measures. The “Detroit Three” are already planning to cut marketing budgets to help achieve this aim (MW, December 10).
Chrysler chief executive Bob Nardelli has asked for a $7bn (£4.8bn) bridging loan by December 31 to help the carmaker survive until market conditions improve.
Meanwhile, GM has promised that by 2012 it will have fewer brands and nameplates, dealers and employees, and much less debt on its balance sheet, under a restructuring plan. Ford has announced that it does not expect to make money until at least 2011.
As part of the plans, Ford chief executive Alan Mulally vowed to work for an annual salary of $1 (69p), instead of $2m ($1.4m), if the carmaker accepts the federal aid.