Treasury to give GM second loan of $5.4 billion

The U.S. Treasury said Monday it will grant General Motors Corp. a second loan totaling $5.4 billion on Jan. 16 as part of the $13.4-billion rescue of the ailing automaker.

The second loan, following the $4-billion loan issued last week, was disclosed in an update on the Treasury's spending of money from the $700-billion financial industry bailout.

Chrysler LLC won its $4-billion loan last week as well.

With the GM and Chrysler aid plans, and the $6-billion infusion into GMAC, the Treasury cannot lend the additional $4 billion it pledged to GM without tapping the second half of the bailout fund, something Congress has vowed to block until after the Obama administration takes office.

The rest of the first $350 billion has been pledged to shore up banks and financial institutions such as insurer AIG. Detroit Free Press