In the latest major shake up of the automotive industry, Daimler has reached a deal to relinquish its stake in Chrysler, while General Motors now plans to slash 21,000 jobs in the US and axe its Pontiac brand.
German carmaker Daimler will give up its 19.9% stake in Chrysler and free the US company of any outstanding loans.
Chrysler, which has already received a $4bn loan from the US government, has a deadline of April 30 to complete its restructuring plan in order to gain further government loans. Failure to do so could see it enter bankruptcy protection.
Meanwhile, GM has announced plans to cut 21,000 jobs in the US and phase out its Pontiac brand by the end of 2010. It will need to put its restructure measures in place by June 1 in order to gain the government loans and also avoid bankruptcy protection.
GM has so far received $15.4bn in government loans. The new rash of job losses will include the 7,000 to 8,000 cuts already announced in February. It is believed that around 20% of its 220-strong marketing and communications staff in the US could face the chop.