Government Approves $17.4 Billion Auto Industry Bailout

The Bush administration Friday approved an emergency $17.4 billion bailout of the U.S. auto industry, offering loans in exchange for concessions from automakers and their workers, the Associated Press reported.

The federal government will have the option of becoming a stockholder in the companies, much as it has with major banks, in effect partially nationalizing the industry, AP said.

About $13.4 billion will be available into January, with $9.4 billion going to General Motors Corp. and $4 billion to Chrysler LLC, AP said.

Both automakers said they would likely be unable to pay their bills without federal help. Ford Motor Co. has said it does not need immediate help, AP reported.

Under the loan terms, GM and Chrysler must provide the government with stock warrants giving it the option to buy GM and Chrysler stock at a specific price, while setting limits on executive pay and eliminating perks such as corporate jets, AP said.

The trucking industry provides extensive transportation services to automakers and their parts and equipment suppliers.