If the U.S. Big Three automakers want bailout help from the Federal government they should submit to at least an afternoon of new public hearings.
Automakers were heard from in September on the subject of attaching the $25 billion loan program to a continuing resolution for the Federal budget. That legislation, which passed, kicked off the process for such loans to move ahead—-loans that were part of last year’s energy legislation. The money is meant to go to help the companies re-tool factories and offset some research and development costs associated with more fuel efficient vehicles. The key is that all the loans must be attached to offset costs of vehicles that get 25% better fuel economy than the vehicle segment average. In other words, if Ford wants loan money to offset the costs of bringing its Fiesta to market, the car will have to exceed the average of the vehicles in the segment by 25% at the time the application is made.
I don’t see why they can’t give it out of the $700 bn
Because the automotive industry wasn’t included in the submission for funds?
When you get a grant for specific purpose (from charities, trusts or government) then you use the money for THAT purpose. Tha’t how the system works – allocated funds and allocated area of responsibility.
You should not expect people with public money to sit on $700bn and say “look at all the cash we have – now who ELSE is worthy?” and start expanding the scope of the grant – THAT would be criminally fradulent.
the government should just take over the 14 billion in pension payments a year and be done with it. remove that liability and let them sink or swim.
Yea, it’s sad to think that folks believed in life-time benefits. Unfortunately, there are many others in that position. I don’t see why they can’t give it out of the $700 bn, but I guess the only folks that matter to Paulson/Bush are the Banking personnel and their families.
Maybe that universal health care idea will become reality if millions more are out of work with no medical insurance.
The fate of the Big 3 being put on hold also has to do with the way AIG went about wasting a lot of the money we bailed them out with. I hope the next time the CEO’s come to Washington they atleast Jet-Pool or something so that they can seem to know how to play the begging game. :sarcasm:
How much are senators paid? I think it’s $125k a year and they work about 100 days a year, thats like $1,250 for a days work. The can’t even plan lunch. ” title=”” class=”bbcode_smiley” />
Get ready! after this ecomomic crisis we’re going to see some serious prosperity in 2010
nows the time to plan! View ths recession as an opportunity and not a bummer.
[A bipartisan group of auto-state senators reached a last-ditch compromise Thursday to throw Detroit’s Big Three a government lifeline worth billions, but the plan faces an uphill battle in a reluctant Senate.
With the auto bailout stalled, the fate of hundreds of thousands of workers and Detroit’s once-venerable car companies hangs in the balance.
Senate Majority Leader Harry Reid, D-Nev., canceled plans for a vote on a bill to carve $25 billion in new loans out of the $700 billion Wall Street rescue fund. The Bush administration and congressional Republicans oppose that plan.
Warning of economic disaster, Democrats and Republicans from auto industry states reached a deal Thursday on an alternative package that would temporarily divert money from a fuel-efficiency loan program to cover the Big Three’s immediate costs. But it was unclear whether it could draw enough support to pass.
The group, led by Sens. Carl M. Levin, D-Mich. and Kit Bond, R-Mo., scheduled a news conference to announce details.
Even if agreement can be reached to consider their plan, Reid signaled earlier Thursday that the Senate was not likely do so until after Thanksgiving.
“We have some procedural roadblocks,” Reid said.
With all sides sensing doom for a Big Three automaker rescue, the finger-pointing proceeded.
White House press secretary Dana Perino on Thursday blamed Reid for not allowing the Republicans’ separate auto-aid plan to come up for a vote.
“Unfortunately it looks like Sen. Reid just wants to pick up his ball and go home for the next two weeks — two months — for vacation,” she said.
Pressed on what the White House would do if Congress can’t agree on a plan to rescue the automakers this week, Perino said she thought lawmakers would return after the Thanksgiving holiday for an emergency legislative session if an auto company was in imminent danger of collapsing.
“I can’t imagine a scenario where they wouldn’t come back, unless the answer is that they just don’t care. And if that’s the case, then the American people ought to know that.”
Congressional Democrats countered that the Treasury Department already had the power to grant emergency funds to the automakers, but the Bush administration opposed the approach.
Former Massachusetts Gov. Mitt Romney stood steadfastly behind forces opposing the bailout.
Speaking Thursday morning amid growing signs of gridlock in Congress, Romney said, “There’s no question but that if you just write a check, you’re going to see these companies go out of business ultimately.”
Romney, who had run for the Republican presidential nomination, told CBS’ “The Early Show” that he doesn’t want to see the carmakers go out of business, “but we don’t want them to continue business as usual.”
The leaders of General Motors Corp., Ford Motor Co. and Chrysler LLC painted a grim picture of their financial position during two days of congressional hearings, warning that the collapse of the auto industry could lead to the loss of 3 million jobs. Detroit’s automakers, hurt by a sharp drop in sales and a nearly frozen credit market, burned through nearly $18 billion in cash reserves during the last quarter — about $7 billion at GM, almost $8 billion at Ford and $3 billion at Chrysler. Both GM and Chrysler said they could collapse in weeks.
“I don’t believe we have the luxury of a lot of time,” GM CEO Rick Wagoner told a House hearing.
Alan Mulally, the CEO of Ford Motor Co., said the company had enough cash reserves to make it through 2009. But United Auto Workers union president Ron Gettelfinger said a bankruptcy could spawn others.
“If there’s a Chapter 11 (for) one of the companies, it will drag at least one other with them, if not all of them. And I do not believe Chapter 11 is where it will end. It will go to liquidation,” he said ominously.
Automakers ran into more resistance from House lawmakers, who chastised the executives for fighting tougher fuel-efficiency standards in the past and questioned their use of private jets while at the same time seeking government handouts.
“My fear is that you’re going to take this money and continue the same stupid decisions you’ve made for 25 years,” said Rep. Michael Capuano, D-Mass.
The stakes are high. The Detroit automakers employ nearly a quarter-million workers, and more than 730,000 other workers produce materials and parts that go into cars. About 1 million more people work in dealerships nationwide. If just one of the automakers declared bankruptcy, some estimates put U.S. job losses next year as high as 2.5 million.
The White House and congressional Republicans have urged Democrats to support a GOP plan to divert a $25 billion loan program created by Congress in September — designed to help the companies develop more fuel-efficient vehicles — to meet the auto giants’ immediate financial needs.
Sens. Carl Levin, D-Mich., Kit Bond. R-Mo., and George Voinovich, R-Ohio, are trying to broker an alternative that could provide bridge loans or a guarantee that the fuel-efficiency loan fund ultimately would be replenished. Negotiators were discussing a scaled-down aid package of $5 billion to $8 billion to help the automakers survive through year’s end.
But it was unclear if any progress could be made. Democrats strongly oppose letting the car companies tap into the energy loans for short-term cash-flow needs.
Despite the gridlock in Congress, there could be a contingency plan: a return to Washington in December for another postelection session to try to strike a deal.
House Majority Leader Steny Hoyer, D-Md., noted that Democratic leaders were planning to gather for an economic conference the week of Dec. 8. “That is available,” Hoyer said. “The year has not ended.”
This is a GM video. Now they are saying America will be owned by the terrorists if they don’t get a bailout.
That’s what they said about the Budwiser Deal earlier this year. :sarcasm:
They also refused to use $24bn for mortgage loan modification as well. :sarcasm:
Guess they’re lacking in innovation and management talent, but twice as bad as detroit.
This is a credit crisis, banking collapse and rapidly heading for a depression. Detroit had a plan to get them thru till early 2011, but the world collapsed on them and wiped out 2 years of the plan because of 50% drops in sales and a failed credit system.
Complain all you want about bailouts, but detroit had a plan, it didn’t take into account a collapse of the financial system. The guys who caused this on wall street, in the city and the rest of the financial world got bail outs for their failed businesses, now others need help to handle the fallout. Now the world wants to blame detroit’s problems on their own bad planning.
I judge what should be done by looking at the lack of action taken by the US government in 1929-1933 and Japanese government who worried about inflation in after 1989, rather than the deflation that followed. So, far we are failing to deliver the money that was already agreed upon. We’re heading for a deflationary collapse and high unemployment. I say let’s risk keeping wobbly industries running for a few years for the sake of stability if nothing else. Remember our competitors are running up debt and starting to collapse just like us, maybe worse (look at russia right now).
BTW – The University of Chicago is the home of “free market economics”, Milton Friedman and the folks who view human death as just another economic factor and no more negative than any another cost. In short, you won’t be finding very much from the U of Chicago influencing the Obama Team. Obama’s economic team are East Coast Liberal economists from Harvard, MIT, Hopkins, etc that ran things under clinton.
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