GM, Chrysler go down to the wire in talks with union, bondholders

Washington  - With a Tuesday deadline looming to submit proof to the government that they can survive, troubled US automotive giants General Motors and Chrysler were still locked in negotiations with unions and creditors to gain concessions.

Talks continued late Monday in Detroit, with the two companies pushing for billions of dollars of cost-cutting measures.

General Motors will borrow another 4 billion dollars on Tuesday from the federal government, as scheduled, the Bloomberg financial news agency reported. President Barack Obama's administration is expected to issue the money, which was part of a 13-billion-dollar interim bailout devised in December under former president George W Bush.

Citing a source familiar with the negotiations, the Detroit Free Press newspaper reported on its website that GM's talks with bondholders were unlikely to produce a deal on Tuesday.

Everyone is working around the clock," the newspaper quoted its source as saying.

If they cannot prove that they have made the changes to survive, GM and Chrysler will have to give the borrowed money back to the federal government and will not get any more loans, according to the original terms of the agreement.

A presidential task force on the automotive industry will exercise oversight of the agreement for the government.

The companies will have until March 31 to make demonstrable progress in carrying out the restructuring plans that are to be laid out in Tuesday's reports.

US car sales fell to a 27-year low in January. Ford was the only one of Detroit's "Big Three" firms that did not seek urgent government help in December.

Chrysler, which has received 4 billion dollars, and GM, which will have received 9.4 billion dollars as of Tuesday, spent much of the weekend talking to the United Auto Workers union to gain concessions on retirement and health benefits. (dpa)

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