Automakers To Get $17.4 Billion Boost
Thread Starter
banned
iTrader: (13)
Joined: Oct 2007
Posts: 2,746
From: Walnut Creek Ca..
Car Info: heel'n toe da hoe...
Automakers To Get $17.4 Billion Boost
Automakers To Get $17.4 Billion Boost
CBS News Interactive: About Detroit's Big 3 BailoutWASHINGTON (CBS) ―
Click to enlarge
AP
1 of 1
Close
numSlides of totalImages Related StoriesBush Considers 'Orderly' Auto Bankruptcy (12/19/2008)
GM Denies Chrysler Talks Report (12/18/2008)
White House Auto Bailout Plan In Neutral (12/18/2008)
Ford To Close 10 Assembly Plants For Extra Week (12/17/2008)
Small Cars Make Safety Gains (12/17/2008)
Related LinksCBS News Interactive: About Detroit's Big 3 Bailout
After weeks of stalled deals and rumors of industry collapse, the White House finally stepped in to provide struggling automakers $17.4 billion in financial relief.
President George W. Bush announced Friday a plan to give troubled automakers short-term loans to help them avoid failure and provide the opportunity to restructure for the future.
"Allowing the auto companies to collapse is not a responsible course of action," President Bush said. He said that a bankruptcy was unlikely to work for the auto industry at this time and would deal "an unacceptably painful blow to hardworking Americans" across the economy.
The Big Three will receive $13.4 billion in short-term financing from the larger financial bailout money that Congress passed to rescue Wall Street firms back in October. Another $4 billion would become available for the carmakers in February.
It's expected only General Motors and Chrysler will take advantage of the money, reports CBS News correspondent Mark Knoller.
The auto companies have until the end of March to become financially viable. If they don't, the loans will be called in and all funds must be returned. The deal also requires the automakers to give the government loans priority over other creditors, limits on executive pay and elimination of perks like corporate jets.
Autoworkers will also have to make concessions. The government set targets to allow the Big Three to become competitive with foreign competitors by the end of 2009 as far as wages and worker rules.
Had the government allowed the auto industry to implode, experts said the effects would have been dire for the larger economy.
"You cannot let a company the size of GM fail simply because it would shut down the supply base and it would literally shut down, in my opinion, U.S. manufacturing," Erich Merkle, an auto analyst at Crowe Horwath, told CBS Radio.
Attempts to pass a bailout bill stalled in the Senate earlier this month after making it through the House.
Meanwhile, Treasury Secretary Henry Paulson said Friday that Congress will need to release the last half of the $700 billion rescue fund because the first $350 billion has been committed.
Paulson says the use of the rescue fund to provide loans to the auto industry along with a string of other rescue efforts means that the administration has now basically allocated the first half of the largest government bailout program in history.
He says he is confident that the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. have the resources to address a significant market event if one should occur before Congress approves the use of the second half of the rescue fund.
On Thursday, the Bush administration had indicated it would consider an "orderly" bankruptcy to keep the automakers from failing.
But the Big Three automakers insisted that bankruptcy wasn't the answer, as did an official of the United Auto Workers who called the idea unworkable and even dangerous. The car companies argue that no one would buy a vehicle from a bankrupt company for fear that the company might not be around to honor warranties or maintain a supply of spare parts.
The National Automobile Dealers Association also spoke out against bankruptcy "in any way shape or form, orderly or disorderly, prepackaged or unpackaged, managed or unmanaged," said spokesman Bailey Wood.
While they wait for a rescue package, the automakers have announced extended holiday shutdowns. Chrysler is closing all 30 of its North American manufacturing plants for four weeks because of slumping sales; Ford will shut 10 North American assembly plants for an extra week in January, and General Motors will temporarily close 20 factories - many for the entire month of January - to cut vehicle production.
.................................................. ................
Does this seem retarded to you? Where is my bailout?
(I just made a grip of cash)
CBS News Interactive: About Detroit's Big 3 BailoutWASHINGTON (CBS) ―
Click to enlarge
AP
1 of 1
Close
numSlides of totalImages Related StoriesBush Considers 'Orderly' Auto Bankruptcy (12/19/2008)
GM Denies Chrysler Talks Report (12/18/2008)
White House Auto Bailout Plan In Neutral (12/18/2008)
Ford To Close 10 Assembly Plants For Extra Week (12/17/2008)
Small Cars Make Safety Gains (12/17/2008)
Related LinksCBS News Interactive: About Detroit's Big 3 Bailout
After weeks of stalled deals and rumors of industry collapse, the White House finally stepped in to provide struggling automakers $17.4 billion in financial relief.
President George W. Bush announced Friday a plan to give troubled automakers short-term loans to help them avoid failure and provide the opportunity to restructure for the future.
"Allowing the auto companies to collapse is not a responsible course of action," President Bush said. He said that a bankruptcy was unlikely to work for the auto industry at this time and would deal "an unacceptably painful blow to hardworking Americans" across the economy.
The Big Three will receive $13.4 billion in short-term financing from the larger financial bailout money that Congress passed to rescue Wall Street firms back in October. Another $4 billion would become available for the carmakers in February.
It's expected only General Motors and Chrysler will take advantage of the money, reports CBS News correspondent Mark Knoller.
The auto companies have until the end of March to become financially viable. If they don't, the loans will be called in and all funds must be returned. The deal also requires the automakers to give the government loans priority over other creditors, limits on executive pay and elimination of perks like corporate jets.
Autoworkers will also have to make concessions. The government set targets to allow the Big Three to become competitive with foreign competitors by the end of 2009 as far as wages and worker rules.
Had the government allowed the auto industry to implode, experts said the effects would have been dire for the larger economy.
"You cannot let a company the size of GM fail simply because it would shut down the supply base and it would literally shut down, in my opinion, U.S. manufacturing," Erich Merkle, an auto analyst at Crowe Horwath, told CBS Radio.
Attempts to pass a bailout bill stalled in the Senate earlier this month after making it through the House.
Meanwhile, Treasury Secretary Henry Paulson said Friday that Congress will need to release the last half of the $700 billion rescue fund because the first $350 billion has been committed.
Paulson says the use of the rescue fund to provide loans to the auto industry along with a string of other rescue efforts means that the administration has now basically allocated the first half of the largest government bailout program in history.
He says he is confident that the Treasury Department, Federal Reserve and Federal Deposit Insurance Corp. have the resources to address a significant market event if one should occur before Congress approves the use of the second half of the rescue fund.
On Thursday, the Bush administration had indicated it would consider an "orderly" bankruptcy to keep the automakers from failing.
But the Big Three automakers insisted that bankruptcy wasn't the answer, as did an official of the United Auto Workers who called the idea unworkable and even dangerous. The car companies argue that no one would buy a vehicle from a bankrupt company for fear that the company might not be around to honor warranties or maintain a supply of spare parts.
The National Automobile Dealers Association also spoke out against bankruptcy "in any way shape or form, orderly or disorderly, prepackaged or unpackaged, managed or unmanaged," said spokesman Bailey Wood.
While they wait for a rescue package, the automakers have announced extended holiday shutdowns. Chrysler is closing all 30 of its North American manufacturing plants for four weeks because of slumping sales; Ford will shut 10 North American assembly plants for an extra week in January, and General Motors will temporarily close 20 factories - many for the entire month of January - to cut vehicle production.
.................................................. ................
Does this seem retarded to you? Where is my bailout?
(I just made a grip of cash)
They won't prove anything by March.
They got their money, and they will soak it up and still fail next year.
If they should be proving anything, it should've been done BEFORE getting any money. And yes, the UAW should've given in and given concessions NOW... OR they could've given a date as to when they would have equaled benefits pay that foreign makes give at their US plants.
Oh well. Lets see in March what happens.
They got their money, and they will soak it up and still fail next year.
If they should be proving anything, it should've been done BEFORE getting any money. And yes, the UAW should've given in and given concessions NOW... OR they could've given a date as to when they would have equaled benefits pay that foreign makes give at their US plants.
Oh well. Lets see in March what happens.
Registered User
iTrader: (2)
Joined: Oct 2005
Posts: 2,585
From: Los Altos, CA
Car Info: The Latest From WayneTech.
Look out for massive going out of business sales. How are they going to pay off the loan when they are not "financially viable" by March? Do I get a free car now? I pay #$%^ load to goverenment each year.
But I really want a baby diesel! I don't need a 7.0 Liter V8!
Registered User
iTrader: (3)
Joined: Jul 2004
Posts: 1,952
From: Pleasanton, CA
Car Info: a prius, a miata, & 2 m3's
They won't prove anything by March.
They got their money, and they will soak it up and still fail next year.
If they should be proving anything, it should've been done BEFORE getting any money. And yes, the UAW should've given in and given concessions NOW... OR they could've given a date as to when they would have equaled benefits pay that foreign makes give at their US plants.
Oh well. Lets see in March what happens.
They got their money, and they will soak it up and still fail next year.
If they should be proving anything, it should've been done BEFORE getting any money. And yes, the UAW should've given in and given concessions NOW... OR they could've given a date as to when they would have equaled benefits pay that foreign makes give at their US plants.
Oh well. Lets see in March what happens.
IMO it's pretty obvious they won't have a sustainable business model by March. While many perceive the bailouts to be "saving" all these institutions (banks, autos, etc.) the real idea is that they slow the demise of these sectors. I.E., Investment banking is dead. Instead of allowing them to fail, they are letting them turn into banks that use less leverage. Automakers- GM, F, Chrysler should probably fail as well, but they are letting them slowly wind down their operations. Too many jobs would be lost if they just let them fail all at once... granted they are unsustainable and have huge amounts of excess capacity, but we are already losing 500k jobs a month?
Registered User
iTrader: (2)
Joined: Oct 2005
Posts: 2,585
From: Los Altos, CA
Car Info: The Latest From WayneTech.
The two main factors behind this entire economic collapse are:
1. High unemployment
2. No consumer confidence
Bailouts are just ways of trying to hold the bleeding; they will NOT fix the causes of this depression. We need to stimulate the economy into creating JOBS not using government funds to fill the gaps between the job market and the cost of living.
I am very doubtful that this president or the next has the ability to make that connection and actually DEAL with the problem instead of just covering it up and sweeping it under the rug.
1. High unemployment
2. No consumer confidence
Bailouts are just ways of trying to hold the bleeding; they will NOT fix the causes of this depression. We need to stimulate the economy into creating JOBS not using government funds to fill the gaps between the job market and the cost of living.
I am very doubtful that this president or the next has the ability to make that connection and actually DEAL with the problem instead of just covering it up and sweeping it under the rug.
General Pimpin'
iTrader: (7)
Joined: May 2003
Posts: 23,019
From: Knee deep in beer. subabrew crew, ca.
Car Info: MY04 aspen wrx wagon.
I'd like to add a couple things to that collapse.
>8 months of gas price gouging
>over inflated housing market with poor loan choices
>excess consumer debt
>poor economic choices at upper levels (read iraq war doesn't help any)
>large scale outsourcing that feeds other economies that are not buying american products or paying american taxes
Much of the same crap that ushered in the great depression. Only difference is we've already industrialized and don't have another WW to feed our economy. This is recoverable but as a country we need to be realistic. That includes the 1% that are bending this country over a barrel to stuff an extra billion into their pockets to make the stock market happy and feed their greed. Stop market manipulations based on futures and force these companies to reinvest in new technologies. Absolutely no excuse that every civic, focus, small car built right now isn't capable of 45mpg.
>8 months of gas price gouging
>over inflated housing market with poor loan choices
>excess consumer debt
>poor economic choices at upper levels (read iraq war doesn't help any)
>large scale outsourcing that feeds other economies that are not buying american products or paying american taxes
Much of the same crap that ushered in the great depression. Only difference is we've already industrialized and don't have another WW to feed our economy. This is recoverable but as a country we need to be realistic. That includes the 1% that are bending this country over a barrel to stuff an extra billion into their pockets to make the stock market happy and feed their greed. Stop market manipulations based on futures and force these companies to reinvest in new technologies. Absolutely no excuse that every civic, focus, small car built right now isn't capable of 45mpg.
IMO it's pretty obvious they won't have a sustainable business model by March. While many perceive the bailouts to be "saving" all these institutions (banks, autos, etc.) the real idea is that they slow the demise of these sectors. I.E., Investment banking is dead. Instead of allowing them to fail, they are letting them turn into banks that use less leverage. Automakers- GM, F, Chrysler should probably fail as well, but they are letting them slowly wind down their operations. Too many jobs would be lost if they just let them fail all at once... granted they are unsustainable and have huge amounts of excess capacity, but we are already losing 500k jobs a month?
Tell that to some folks on this board and some of the 'mericans out in the midwest. Their jobs are toast, now, or later... and the ones who really benefit from this bailout will be the execs and probably shareholders in someway. The workers are gonna be out a job no matter what, just a matter of time.
I'm with you on this, I feel they will fail as well.
I still feel they didn't gouge, and that it's mostly still supply and demand. maybe 1/4 to 1/3 was due to oil futures trading, but if you look at OPEC's cut, and everyone on TV saying that prices will go up... they didnt, becuase the oil inventory in the US has grown 12 weeks straight. Supply is still growing, and the price of oil, still falling.
The only thing right now that will make price of crude go up is if people start buying the stock. I don't see demand from the US growing for some time, and the inventory is just going to keep growing for probably at least 6mo - year.
The only thing right now that will make price of crude go up is if people start buying the stock. I don't see demand from the US growing for some time, and the inventory is just going to keep growing for probably at least 6mo - year.
General Pimpin'
iTrader: (7)
Joined: May 2003
Posts: 23,019
From: Knee deep in beer. subabrew crew, ca.
Car Info: MY04 aspen wrx wagon.
I believe that about 60 percent of the increase was do to supply/demand. I put the rest on futures and strait gouging. There is no way in hell that gas should have gone over $4 a gallon. NO WAY. I have no qualms paying $2.50 a gallon to tell you the truth. Stoked to be paying under $2 and didn't really ***** to much until it went over $3. The fact that it rose more in 2 months than it rose in 20 years tells me it wasn't just supply and demand. No way supply went down in comparison to demand THAT quickly. No way.
I read a bunch of studies and tried to keep up with what the pros were saying and I'll admit I clearly don't understand it all but I find myself in the middle of what most were saying. One side all supply demand. The other side gouging and futures. I read an article saying that if futures were stopped prices would drop to below $2 in a month or less. The fight over futures happened. The media jumped on the oil companies. The financial reports came out. Stopping futures didn't happen but the fact they tried I think helped spur the down turn. Along with a few other things. But sure as ****. Below 2 dollars in about a month.
Mind you my family has a lot of oil stocks... actually a few oil rigs so an increase in stock prices with chevron and crude values helps my family. Not me directly but my family.
I read a bunch of studies and tried to keep up with what the pros were saying and I'll admit I clearly don't understand it all but I find myself in the middle of what most were saying. One side all supply demand. The other side gouging and futures. I read an article saying that if futures were stopped prices would drop to below $2 in a month or less. The fight over futures happened. The media jumped on the oil companies. The financial reports came out. Stopping futures didn't happen but the fact they tried I think helped spur the down turn. Along with a few other things. But sure as ****. Below 2 dollars in about a month.
Mind you my family has a lot of oil stocks... actually a few oil rigs so an increase in stock prices with chevron and crude values helps my family. Not me directly but my family.
Thread
Thread Starter
Forum
Replies
Last Post
dr3d1zzl3
Bay Area
53
May 15, 2005 12:08 AM
VIBEELEVEN
Teh Politics Forum
10
Nov 18, 2004 05:32 AM