Finally. After all the bad news of senate refusing the bailout money, and Big Three closing factory plants, it's time for good, old fashion happy news. And here's one.President Bush and the federal government have approved a $13.4 billion low interest loan to General Motors and Chrysler. Ford is not included in the bailout because they currently do not need financial aid. The White House has said that an additional $4 billion may become available in February, 2009. “Allowing the U.S. auto industry to collapse is not a responsible course of action,” President Bush said today. The White House has been clear that it does not want the collapse of the US auto industry to happen, especially on their watch. The money will come from left-overs of Bush's $700 billion TARP money.
The bailout is designed to carry GM and Chrysler through March, 2009, at which point, the firms must show financial viability. If they cannot achieve viability at that time, the loans must be repaid to the Treasury. In addition, the Fed has made a few other demands of GM and Chrysler. So if GM and Chrysler don't repay the loan to the Treasury, they're dead.
This is what GM, Chrysler and Ford had to say:
General Motors
"We appreciate the President extending a financial bridge at this most critical time for the U.S. auto industry and our nation's economy. This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us," said GM in a statement.
Chrysler LLC
Chrysler LLC Chairman and CEO Bob Nardelli said on behalf of the men and women of the company and its extended enterprise, that he would like to thank the Administration and Treasury for their confidence in the Company. So he said, "A letter of intent was signed which outlines the specific requirements that must be achieved," said Nardelli. "These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these requirements"
Chrysler LLC Chairman and CEO Bob Nardelli said on behalf of the men and women of the company and its extended enterprise, that he would like to thank the Administration and Treasury for their confidence in the Company. So he said, "A letter of intent was signed which outlines the specific requirements that must be achieved," said Nardelli. "These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these requirements"
Ford Motor Company
Though Ford did not need a loan itself, the company welcomed the action by the Administration to provide emergency funding for GM and Chrysler LLC. "As we told Congress, Ford is in a different position. We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government," Ford President and CEO Alan Mulally said. "But all of us at Ford appreciate the prudent step the Administration has taken to address the near-term liquidity issues of GM and Chrysler. The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy," he added
Though Ford did not need a loan itself, the company welcomed the action by the Administration to provide emergency funding for GM and Chrysler LLC. "As we told Congress, Ford is in a different position. We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government," Ford President and CEO Alan Mulally said. "But all of us at Ford appreciate the prudent step the Administration has taken to address the near-term liquidity issues of GM and Chrysler. The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy," he added
So, Merry Christmas Detroit
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