US unveils 17.4 billion-dollar loans to bail out auto industry

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Source: CCTV.com | 12-20-2008 12:31

Special Report:   Global Financial Crisis

Citing danger to the American economy, President George W. Bush has announced a 17.4 billion US dollar loan to bail out Detroit's ailing auto industry.

U.S. President George W. Bush arrives to make  comments on the automaker's industry in the  Roosevelt Room at the White House in Washington,  Dec. 19, 2008. The White House announced on  Friday a rescue plan of multi-billion dollars  in emergency loans to bail out the country's  crippled auto industry from bankruptcy.  (Xinhua/Reuters Photo)

 
The announcement came after an earlier attempt by the Bush administration to help US car makers was rejected by the Senate. Yang Weihan has more.

Bush announced the loan program on Friday, just weeks before leaving office.

Some 13.4 billion US dollars will be made available in December and January. Of this amount, 9.4 billion will be for General Motors, with the rest for Chrysler.

The three-year loans would require limits on executive compensation and other perks, and the auto makers must provide the government with stock warrants, giving it the option to buy their stock at a specific price.

Bush added that workers at the two companies need to agree to wage and work adjustments, to make them more competitive against foreign auto makers by the end of next year.