Treasury working with automakers on a $10 billion bridge loan

The Treasury Department is working closely with automakers to grant GM and Chrysler a loan package of roughly $10 billion that would help them survive through February. An announcement is expected as early as tomorrow morning according to one auto official who said the Treasury is considering “a bridge to a bridge loan” rather than the full amount sought by Detroit’s Big 3.

Sources close to the matter said that the Treasury is considering most if not all of the remaining $15 billion from the first $375 billion of the $700 billion bailout money for the financial institutions ($350 billion have already been issued to Wall Street).

GM has said that it needs $4 billion this month and $4 billion in January. Chrysler, on the other hand, has asked for $7 billion. That conveniently totals $15 billion.

Treasury Secretary Henry Paulson told Fox News on Monday that Detroit’s Big 3 wouldn’t be allowed to fail.

Source: Detroit News