The two US carmakers that are in the greatest financial trouble have started getting taxpayers’ money to head off bankruptcy. This month and next, General Motors will receive the equivalent of 6.5 billion euros in what are supposed to be loans and Chrysler just under three billion. However economists said this is just the start and the US government could have to hand over at least 70 billion euros in the long term and may never get much of that money back.
Washington had little choice with an estimated one million jobs at stake. In return for the bailout GM and Chrysler have promised major reorganisations to cut spending. They include limits on their bosses’ pay and forcing the unions to accept steep wage cuts which they are not keen to do. Details have to be worked out and announced by the carmakers by the end of March.