The Bush administration expanded its bailout of the US auto industry, saying it was buying $5 billion (€3.5 billion) in equity in auto and mortgage finance company GMAC and increasing a loan to General Motors by $1 billion (€0.7 billon).
The action was the latest in a lengthy series of emergency government moves aimed at easing the worst credit crisis since the 1930s and limiting the severity of a year-long recession.
The Treasury Department said it would buy $5 billion in senior preferred equity with an 8 per cent dividend from GMAC as part of an effort to ensure the solvency of a company considered crucial to GM's survival.
It also said it would lend up to $1 billion to fund GM's purchase of equity in support of GMAC's reorganization as a bank holding company.
That loan would come on top of assistance extended to the No. 1 US automaker earlier this month.
Reuters
