Automakers Await Green Light On Loans

Bush Promises Detroit A Way Forward To Avoid Bankruptcy But Offers No Timetable

(AP)  Detroit automakers got public reassurance Monday from President George W. Bush that short-term government help for the industry is in the works and could come soon.

"An abrupt bankruptcy for autos could be devastating for the economy," Mr. Bush told reporters aboard Air Force One during an unannounced trip to Iraq and Afghanistan. "We're now in the process of working with the stakeholders on a way forward. We're not quite ready to announce that yet."

Mr. Bush wouldn't give a precise timetable but said, "This will not be a long process because of the economic fragility of the autos."

On Monday a Treasury Department official said no decisions have been made on what type of support to provide major U.S. automakers.

Treasury spokeswoman Brookly McLaughlin said department officials are continuing to assess the information they have received from the auto companies. She said the White House is being kept informed through regular briefings.

McLaughlin did not estimate how long it may take the administration to reach a decision.

The Bush administration is considering ways of providing emergency aid to General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks without help from the government.

White House officials said they did not anticipate announcing funding for the companies on Monday, as auto industry officials held discussions with the administration on the amount of money and any conditions that might be imposed.

"I think it's very likely the White House will do what it said it's going to do, not allow the auto industry to collapse," said Sen. Carl Levin, D-Mich., among several auto state lawmakers optimistic about the funding.

But Sen. Bob Corker, R-Tenn., said he spoke with the White House early Sunday and no decisions had been made. "I don't think they yet know what they're going to do," Corker said. Ron Gettelfinger, the president of the United Auto Workers, said the union had not held discussions with the White House.

General Motors and Chrysler are seeking the funding, while Ford Motor Co. has said it has enough cash to survive 2009.

Last week, Congress failed to approve $14 billion in loans to help the automakers. The plan would have provided short-term financing to the industry and created a "car czar" who would ensure that the money would transform the Detroit automakers into competitive companies.

The administration, following the legislative defeat, said it was considering several options, including using money from the $700 billion financial bailout fund to provide loans to the carmakers. Mr. Bush reiterated Monday that tapping the financial bailout fund remains an option.

Providing aid to the companies could represent a change for the White House, which previously insisted that the Wall Street rescue plan should be used solely to help financial institutions.

Corker and other Republicans sought a compromise that would have required the carmakers to restructure their debt and bring wages and benefits in line with those paid by Toyota, Honda and Nissan in the United States. The legislation died when Republicans demanded upfront pay and benefit concessions from the United Auto Workers, which union leaders rejected.

Corker urged the White House to seek similar concessions from the auto companies and their unions in return for the money. "Of course, the benefit they have - they don't have to negotiate. They can say this money is available but it's only available under these conditions," he said in a broadcast interview.

The administration has several options. It could tap the $700 billion financial rescue bailout fund to provide loans directly to the carmakers or use part of that fund as collateral for emergency loans the automakers could get from the Federal Reserve.

It also could do nothing, leaving open the possibility that one or more of the automakers could go bankrupt. The White House has warned a collapse of the auto industry would severely hurt the economy.

The White House is keeping President-elect Barack Obama and his advisers informed of the discussions. If administration officials choose not to provide the money now, the Obama team could wait for the new Congress, which will have stronger Democratic majorities. But the delay could risk bankruptcy filings by GM and Chrysler.

Gov. Jennifer Granholm, D-Mich., said other countries were providing aid to their automakers and the loans were essential to make the U.S. less dependent on foreign oil.

If the companies don't get help, "we'll be replacing our reliance on foreign oil with a reliance on foreign batteries because it's going to be the battery that's driving the electric vehicle in the future," Granholm said.

Corker was on CBS' Face The Nation and "Fox News Sunday." Levin was on Face The Nation. Gettelfinger was on CNN's "Late Edition" and Granholm was on NBC's "Meet the Press."

[craigh9]

shame on you for not buying U.S.A. MADE!!
Posted by gagnermc at 07:07 PM : Dec 16, 2008

Normally I would agree with this - BUT - who in their right mind feels that way anymore when you know you are spending more money on a lesser quality product in order to support GROSSLY OVERPAID management and labor - there''s NO VALUE to that, your just throwing your own hard earned money down the drain. Until they get their act together - buy the best made vehicle at the best price you can find - foreign or not

[gagnermc]

WE MUST SUPPORT THE BIG 3 THIS IS U.S.A & shame on you for not buying U.S.A. MADE!! WE MUST HOLD THEM ACCOUNT ABLE FOR MORE FUEL EFF;VEH.ALSO IFWE DO NOT HELP THEM THEN HOW MANY JOBS WILL BE LOST???& THEN WHAT??WE WILL BE THE LAUGHING STOCK OF THE WORLD?? SAME ON THE ADMINISTRATION FOR DOING THIS TO US,WE SHOULD HOLD ALL OF THEM ACCOUNTABLE TOO !!GREED SO SAD! WHAT THE WORLD HAS COME TO!??

[gagnermc]

WE MUST SUPPORT THE BIG 3 THIS IS U.S.A & shame on you for not buying U.S.A. MADE!! WE MUST HOLD THEM ACCOUNT ABLE FOR MORE FUEL EFF;VEH.ALSO IFWE DO NOT HELP THEM THEN HOW MANY JOBS WILL BE LOST???& THEN WHAT??WE WILL BE THE LAUGHING STOCK OF THE WORLD?? SAME ON THE ADMINISTRATION FOR DOING THIS TO US,WE SHOULD HOLD ALL OF THEM ACCOUNTABLE TOO !!GREED SO SAD! WHAT THE WORLD HAS COME TO!??

[rgster08]

My question is regarding financing of new Auto''s
Based on my personal conversation with several banks it is almost impossible to get an auto loan.
Based on this information that the credit market does not exist then why would you loan money to the auto makers. They will be broke again in three months.

[assemblyofso]

One possible solution is to mandate that Honda and Toyota adopt the same wage and benefit expenses as the Big 3 as well as implement their work practices.

The result would result in them making the same high quality autos as the UAW and the Big 3. Everyone would be on a level playing field. Auto sales would skyrocket since consumers would have to replace their cars more often. This could get the economy going again in a hurry.

[staplesla]

I hear it argued that if we don%u2019t bailout the automakers we will lose jobs. However, regardless if the Big 3 gets money or not, they must consolidate which means massive layoffs are coming at the Big 3.

Congress was actually starting to work well on our behalf for once in demanding that the UAW give concessions to make the pay commensurate to those of non-UAW members (Toyota, Nissan, and other U.S. plants). But now the White House says oh well, we will now get the money from the $700 billion TARP. And is it fair for an auto-worker in TN, TX, AL, SC to pay taxes for a bailout to Detroit, in which autoworkers get paid twice as much.

And please stop using the word %u201CDepression%u201D as a scare tactic. We are at 6.7% unemployment which is horrible, but are not near, nor are we going to hit 25% which is a depression level.

Contact the White House and tell them to stop wasting our money. I%u2019d rather invest our money in growing industries and the future of this country. And if the TARP is now used for the automakers, it sets up a slippery-slope for all industries to now come begging for TARP money.

202-456-1111 or [e-mail]

[tx2democrats]

We have been needing to buy a 2nd car but have not since you just don''t know who bad the economy is going to get with "The Shrub" in office, everytime he speaks the economy plunges.

No new car until Pres.Obama takes office and the Economy makes a turnaround. We have always bought American, I love Dodge but if the big 3 continue with the bailout, I really doubt that we''ll be buying from a "going out of business" corporation.

The other issue is that no one feels secure about their jobs, thanks "Oh Great Burning Bush".

[hitoyou11]

Answer 1. NO
Answer 2. NO

When Idiot Bush gives the Tax Payers money away the UAW will have a party. The SCUM BAGS.

[thefarmer77]

Hey CBS put these two questions up for a poll:

1. - How many people plan on buying a new car in the next 2 months?

2. - How many of those that say yes plan to "buying American"?

The answers to these two questions will tell whether the Big 3 survive. IF no one buys cars, what good is a "Bailout" going to do?

[indiana891]

The $14B buys nothing but talk without hard conditions placed upon it''''s acceptance.

I agree! How can failing automobile companies possibly pay back a "loan" + meet UAW and CEO financial demands when no one wants to purchase their products? Didn''t our government give a bailout to financial institutions that made poor loan decisions?

[craigh9]

The $14B buys nothing but talk without hard conditions placed upon it''s acceptance. The major players in this game have created the dire circumstances - we cannot expect them to come up with a solution by themselves. It must be MANDATED that a certain % of management expence and labor expence must be trimmed PRIOR to accessing any funds. Otherwise, it''s like giving a wolf that killed all the chickens in a coop a rooster and a hen and asking him to oversee the repopulation - it makes no sense - AND IT WILL NOT HAPPEN!

[koyt1]

Let''s face it. Bush and Congress do not care what we think. If they received campaign money from the Big 3, of the UAW, that is where your tax dollars will go. They contribute to a political campaign, and expect a pay back.

[likeitis5050]

One has to wonder how truthful all concerned are being at this point considering how covert they''ve all been digging these holes over the last 4 years...amid warning after warning from experts in every field. Now we''re just supposed to swallow the ''sky is falling'' message hook line and sinker? And the stealthy saboteurs who caused all of this are still in full control and not suffering from one consequential kick back. Amazing how really stupid these people all think we are...but even more shocking is how benign they consider us even in light of all that has been revealed. Who should we be more pizzed at...them or us?

The days of getting all the news fit to be printed are long gone....today''s media is just a bunch of rookies hooked up to strings attached to the very people they are supposed to be watching for us!!!