Dec. 30, 2008
Treasury Antes Up In Auto Bailout
Politico: $6 Billion Infusion Into GM May Raise Pressure To Release Second Half Of $700B Bailout
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Timeline Stopgap Measures A look at the series of government moves to try and stem the financial meltdown.
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Section Weathering The Downturn In this economy, it's smart to save. CBS News shows you how.
Stepping into deeper waters to help the auto industry, Treasury Monday night added $6 billion to the $17.4 billion bailout announced Dec. 19, chiefly to help the financial arm of General Motors Corp.
Using financial markets rescue funds, Treasury will purchase $5 billion in senior preferred equity from GMAC LLC, and up to $1 billion more will be lent to GM itself so the automaker can participate in a rights offering at GMAC, which has wanted to reorganize itself as a bank holding company.
GMAC won approval from the Federal Reserve last week to become a bank holding company, but that was contingent on the auto and home loan provider raising at least $30 billion in capital. Treasury’s announcement would appear to move GMAC closer to that goal, and a GM spokeswoman was optimistic Monday night.
From Treasury’s standpoint, the new commitment raises again the pressure on the White House, Congress and the incoming Obama administration to come together on some plan for releasing the second half of the $700 billion financial rescue fund enacted in October.
Even before Monday night, Treasury would need this to happen soon to implement its aid package for the auto industry. And the added $6 billion only makes it more important.
There is some leeway in terms of actual cash flow, since some prior commitments to the banking industry have yet to be fully implemented. But a Treasury official said Secretary Henry Paulson would be meeting “soon” with congressional leaders and the Obama transition team on how to proceed.
"This will restore liquidity in the auto market and help Americans purchase a car,” said Steve Bartlett, president and CEO of the Washington-based Financial Services Roundtable. “This, combined with the deal announced with automakers, will strengthen the entire auto market from manufacturing all the way to the consumer's driveway."
By David Rogers
Copyright 2008 POLITICO
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Add a Comment See all 12 Comments
- Hey US Public - come buy our *** cars and we can help you with the financing - just sign and agree to pay for 6 years on our new cars that MIGHT last you 4 years. Give me a break!!!
Driving to work this morning, in upstate NY, very slowly due to the snow I was able to take note of the cars as they passed me - and 6 out of every 10 was a foreign model - that held true over roughly 100 to 120 cars that went by.
US autos are not desirable to the public due to not meeting expectations of the consumer and being grossly overpriced. If the big 3 would get there heads out of their backsides and drop the price by 20% perhaps people would consider their product worth the risk. - Reply to this comment
- How does this help the consumer? People are out of work, more companies are going under, even people with perfect credit are being denied loans. This does not benefit the consumer. It benefits GMAC and maybe GM but not the consumer.
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Posted by DebinOK1 at 11:28 AM : Dec 30, 2008
Actually it does, if this allows GMAC to losen the purse strings. This part of the financial "bailout"
GM loan is just that, a "loan" - Reply to this comment
- Animals used in rodeo events are subjected to cruel and inhumane treatment. In calf roping, baby calves are violently roped to the ground by their necks as they run up to 27 mph. In steer-wrestling, the contestant chases a steer, grabs him by his horns and twists his neck, and slams him to the ground. Horses and bulls are forced to unnaturally buck by placing a flankstrap painfully around the sensitive part of the animal%u2019s abdomen. Furthermore, without the use of electric prods, sharp sticks and caustic ointments, there would be no rodeo.
Rodeos are even banned in some parts of the U.S. and entire countries. Yet, AT&T and Verizon both insist on supporting cruelty-to-animals. - Reply to this comment
- sockpuppet-name one country where the government runs everything and has it''s population totally depenedent on it that is successful. Just one.
This is a dem bailout for the union and nothing more. What is ironic is that people who make less per hour and a retirement that is nowhere near as cushy will be paying for this. Now that''s irony. - Reply to this comment
- How does this help the consumer? People are out of work, more companies are going under, even people with perfect credit are being denied loans. This does not benefit the consumer. It benefits GMAC and maybe GM but not the consumer.
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Posted by DebinOK1 at 11:28 AM : Dec 30, 2008
Probably helps the UAW for a little while until this money runs out too. - Reply to this comment
- ...(my employees like me a LOT).
Posted by machineguy at 11:53 AM : Dec 30, 2008
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Sure they do.
lol.
You sound desperate.
Hows business?
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Posted by sockpuppet4 at 12:00 PM : Dec 30, 2008
Nope, not desparate except for my attempts at finding INTELLIGENT ways out of this mess our country is in. Not sure why my life has become so important to you but my ideas and opinions arent. Perhaps you dont understand the ideas/opinions or they dont fit with yours. But this isnt a dating site and I have work to do so this dialogue about nothing is over for now. But next time we meet you might try to put away the anger and the predjudice, give up the entitlement and "poor me" attitude, and see if we might have a way to improve our common lot.
Bye for now. - Reply to this comment
- America, business by the government, for the government and of the government. Bigger and bigger government with bigger and bigger business.
Posted by machineguy at 11:35 AM : Dec 30, 2008
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You sound like you are both greedy and poor. How ironic.
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Posted by sockpuppet4 at 11:45 AM : Dec 30, 2008
Nope, wrong on both counts. But since you seem interested in my personal situation I will provide a few more details. Well educated, well traveled, very high IQ, father of 3, stepfather of two, grandfather to 10. Very well respected business leader (my employees like me a LOT).
I find your reants and raves to be pathetic crys for aproval, not searches for answers nor intelligent advice. Its obvious to me that you want a "big daddy" (either the Union or the government) to care for you and you are disappointed that aint happening. You have an obove average life but it was mostly handed to you by executives trying to save their companies. But you dont care, you got yours and you are entitled. - Reply to this comment
- America, business by the government, for the government and of the government. Bigger and bigger government with bigger and bigger business.
- Reply to this comment
- Great. Cant wait to hear how the dealers contributed to the restructuring.
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Posted by sockpuppet4 at 11:02 AM : Dec 30, 2008
I think they are doing like the UAW. Everyone wants to help the Big 3 survive so expect them all to kick in a lot. - Reply to this comment
- How does this help the consumer? People are out of work, more companies are going under, even people with perfect credit are being denied loans. This does not benefit the consumer. It benefits GMAC and maybe GM but not the consumer.
- Reply to this comment
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