Bush Approves Auto Bailout - GM, Chrysler to Get $17.4 Billion
The Detroit News reports that President Bush has announced Friday morning a $13.4 billion bailout for General Motors and Chrysler.
The structure of the bailout is different from that of the financial sector’s recent $700 billion bailout, in that it is in the form of a short-term loan, with apparent strict conditions.
The 3-year loan calls for another $4 billion in February, bringing the total to $17.3 billion.
Here an excerpt from the article:
The White House expects to announce the specific amounts for GM and Chrysler later today and both automakers are expected to sign contracts agreeing to conditions in exchange for loans. The loan is a three-year-loan that is “automatically” callable by March 31 if automakers have not complied with specific conditions. They must show they are viable and have a “positive net cash value.”
There will undoubtedly be many questions, especially considering the article makes no mention of Ford Motor Company, the other struggling auto manufacturer.
This bailout news comes just a day after Chrysler announced they will shut-down plant operations for an entire month in both the U.S. and Canada.
How this bailout will affect Canada remains to be seen. The strict conditions applied to the loan will apparently be very restrictive in regards to the auto-makers operations outside the U.S.
Now that the U.S. has acted, I’m sure we can expect something from the Harper Government soon, even with a prorogued parliament.
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Tags: bailout, chrysler, george bush, gm, united states
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December 19th, 2008 at 9:49 am
these so called restrictions dont seem to make much sense. bush says if the companies dont show themselves to be viable by march 31st, the “loans” will be callable.
so if the companies AREN’T able to get themselves out of apparent bankruptcy, they will be required to repay loans that they AREN’T viable to repay??? that makes no sense.
also chrysler is a private company with a rich parent company.Cerberus Capital management is a private equity firm with billions, yet the government is bailing them out??? cmon!
December 19th, 2008 at 3:36 pm
[...] to grant Chrysler and GM $17.4 billion without any mention of Ford. You can read the article here: http://informedvote.ca/2008/12/bush-…lion/#more-312 What do you guys think about this decision? __________________ [...]
December 19th, 2008 at 4:30 pm
[...] http://informedvote.ca/2008/12/bush-…lion/#more-312 [...]
December 19th, 2008 at 7:23 pm
[...] Vote Bush Approves Auto Bailout – GM, Chrysler to Get $17.4 Billion [...]
March 5th, 2009 at 10:31 pm
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