U.S. unveils auto rescue

The United States announced a $17.4 billion loan package to rescue its stricken auto makers on Friday. General Motors will receive $13.4 bln and Chrysler LLC will get $4 bln of the government auto loans announced on Friday, a White House official said.
Ford does not believe it needs a loan at this time, Joel Kaplan, White House deputy chief of staff, said.
The loans are for the auto manufacturers and not the company's financing arms, he said. But government discussions with the financing arms are ongoing, Kaplan said.
The U.S. funds will come from the $700 bln Troubled Asset Relief (TARP) programme passed by Congress in October and originally designed to help the banking industry.
The loans will be called back if the automakers cannot prove they are viable by March 31.
Both companies have been forced to idle plants and lay off thousands of workers in response to collapsing demand. They had warned they could face bankruptcy without federal assistance.
"The American people want the auto companies to succeed and so do I," President George W. Bush told reporters.
U.S. stock futures turned positive after the news, shares in Europe reversed their earlier losses and the dollar extended gains against the yen.
Carmakers are among the hardest hit by the global economic downturn, with Japan's Toyota expected to report its first ever annual loss.
The head of Japan's No. 2 automaker, Honda, warned the strong yen could cripple Japanese industry and spur massive layoffs and transfers of production abroad.