More Bailouts? Yep: $25 Billion for Auto

Last Updated Sep 25, 2008 8:14 PM EDT

flood.JPGWhile you weren't looking, Congress has approved more bailouts.

On Wednesday, the House of Representatives approved, by a 370-58 vote, a $25 billion package of cheap loans for the Big Three automakers so they can retool their assembly lines to make higher mileage cars. The Congressmen acted while most attention was on the proposed $700 billion bailout for the Wall Street mess.

Chrysler, General Motors and Ford executives had been lobbying hard for the plan. For leverage, they've noted that Michigan and Ohio have a lot of voters who are autoworkers. Both are important swing states in the presidential race.

Technically, all automakers can partake of the loan package once it meets final approval form the Senate and is signed into law by the president. But the bailout has language that the money can be used only for factories that have been in operation for at least 20 years, leaving out most foreign-owned automakers such as Toyota and Honda.
Firms such as those have been doing much better in the slow economy, but they played the bailout fairly low key not wanting to draw anti-foreigner sentiment.

Sources say that the Big Three automakers want additional bailout packages worth at least another $25 billion. Critics say the bailouts are undeserved since the U.S automakers could have noted market trends more astutely and made mileage changes long before now.

Whatever. These days $25 billion or even $50 billion is chump change considering the $700 billion bailout Wall Street financial firms are likely to get.

For more, see Jim Henry's post in Auto.

(Image by theritters via Flickr, CC 2.0)