GM and Chrysler bail-out approved

It’s the news that General Motors and Chrysler have been desperate to hear – the US government has finally agreed to loan to help them stay afloat.

The announcement, made by President Bush earlier today, states that GM and Chrysler will be entitled to .4bn in loans from the Troubled Asset Relief Program – which was set-up to bailout the US banking system.

GM and Chrysler will get .4bn right now and bn in February, and will have to demonstrate by March that they are financially viable – otherwise the loans will be recalled.

The rescue has come after the US Senate rejected a previous plan to offer the struggling Detroit Three – GM, Chrysler and Ford – billions of dollars in loans.

Ford has said that it will not be taking the money, though. It says it can continue to operate without government assistance for the time being.