GM and Chrysler receive Canadian loans amid US restructuring ultimata

General Motors (GM) and Chrysler will receive bridge loans from the government of Canada and the provincial government of Ontario, however no more will be forthcoming from either Canadian or US governments unless the companies can reinvent themselves.

"This is a regrettable but necessary step to protect the Canadian economy. We are doing this on the assumption that we obviously cannot afford either in the United States or Canada a catastrophic short-term collapse." said Stephen Harper, Prime Minister of Canada.

"We cannot, we must not, and we will not let our auto industry simply vanish. This industry is, like no other, an emblem of the American spirit; a once and future symbol of America's success," said Barack Obama, President of the United States. "These companies - and this industry - must ultimately stand on their own, not as wards of the state."

Chrysler will receive CA$1 billion and may in fact be eligible for as much as CA$4 billion. If Chrysler succeeds in the next 30 days with a restructuring plan it would be eligible for a US$6 billion loan. A part of Chrysler's restructuring plan must include a partnership with Fiat within 30 days to appease the US administration. Fiat is a supplier of smaller fuel-efficient vehicles, and the merger will help Chrysler to be viable in the North American market. A Chrysler court bankruptcy would inevitably lead to it being sold off.

General Motors automobile sales plunge by 45%

General Motors Corporation (GM) announced on Wednesday that it saw a 45% drop in United States vehicle sales for its cars in March.

Executives from several auto firms, however, said that there was some hope for the auto industry to stabilise, as car sales rebounded in the last week of March.

"The market is starting to show small signs of life which need to be nourished like seedlings," said the vice president and chairman of Chrysler LLC Jim Press. "It's too early to see a trend, but spring shows signs of hope."

Other automobile manufacturers also saw their car sales slip: Chrysler and the Japanese Toyota both reported a 39% loss, whilst Ford Motor Company sales fell 41%.

US home prices drop at record levels

According to data released on Tuesday, home prices in the United States plunged at the highest rates ever recorded in January.

The S&P/Case Shiller index of home prices in twenty major cities in the US announced that values of homes have slumped over 30% since their peak in 2006 across the country. Regional variations have resulted in larger losses in states such as Nevada and Florida. In the year to this January, prices fell by 19%.

"There are very few bright spots that one can see in the data. Most of the nation appears to remain on a downward path," said the chairman of S&P's index committee, David Blitzer, in a statement.