President Barack Obama offered a fervent hope for Chrysler and General Motors Corp's
Obama said it was the administration's hope that in the coming weeks Chrysler would find a viable business partner and GM would develop a stronger business plan, and GM shares rose more than 6 percent.
It is our fervent hope that in the coming weeks, Chrysler will find a viable business partner and that GM will develop a business plan that will put it on a path to profitability without endless support from the American taxpayer, he said.
The U.S. auto task force formed to oversee the retooling of GM and Chrysler, both operating under emergency government loans, gave GM 60 days of funding from the end of March to cut deeper and faster to receive additional support.
GM must reach agreements with bondholders to reduce about $28 billion of unsecured debt sharply and with the United Auto Workers to cut labor costs and restructure funding for a healthcare trust for union retirees.
Sources familiar with the situation told Reuters last week that GM was in intense and earnest preparations for a possible bankruptcy filing.
The prospect of GM avoiding bankruptcy is becoming less likely, which may be starting to cause bondholders to pursue separate bankruptcy strategies, two sources close to government talks said on Tuesday.
Chrysler must reach a definitive agreement on an alliance with Italy's Fiat SpA
Without additional government support, Chrysler faces likely liquidation.
Chrysler has about $7 billion of secured first-lien loans from Cerberus Capital Management's
The first-lien creditors want to avoid liquidation of Chrysler and are likely to ask for equity and cash to restructure the loans, according to sources familiar with the discussions.
The first lien creditors are expected to make that proposal to the U.S. government within days, according to the sources.
BATTERY INVESTMENTS IN MICHIGAN
Major battery suppliers including the Johnson Controls Inc
Developing advanced battery technology for hybrid, plug-in electric and electric vehicles has been seen as crucial for any turnaround of the U.S. auto industry.
The partnership between JCI and France's Saft
Michigan offered the companies tax credits to lure the operations to the state, home to GM, Chrysler and Ford Motor Co
In Asia, incentives appeared to boost car sales in China as Germany's Volkswagen said sales in mainland China and Hong Kong rose 9 percent in March, setting an all-time monthly record.
Automakers have offered a record level of incentives in the United States to prop up sagging sales, and offers of incentives to turn in older cars have supported sales in Germany.
The short-term success of the scrappage program in Germany has been studied in the UK as well and for possible adoption in the United States, where monthly sales have fallen to the lowest rates since the early 1980s.
(Reporting by Jui Chakravorty Das, Walden Siew, Kevin Krolicki, Soyoung Kim, Eva Kuehnen, Maria Sheahan, Stanley Carvalho, Fang Yan, Jacqueline Wong, Anupreeta Das and John Bowker; Writing by Helen Massy-Beresford and David Bailey; editing by Simon Jessop and Matthew Lewis)