Bridge loans that come from money already appropriated to the Energy Department -- these are funds originally intended to help the companies retool to make fuel efficient vehicles. The President's designee -- the so-called 'Car Czar' -- will bring together all a company's stakeholders -- creditors, labor, shareholders, management, dealers, etc -- to negotiate a restructuring by March 31. A 30-day extension may be granted if the czar believes the stakeholders are negotiating in good faith and if the czar believes a deal can be reached in that extension. If there's no deal by March 31, the czar is REQUIRED to call the loan, which would send the company into insolvency. If there's no deal by March 31, the czar would be required to propose his own course of action, which could include Chapter 11 bankruptcy reorganization. The legislation will also include taxpayer protections, including, but not limited to, stock warrants and limits on executive compensation.
In the 2008 election cycle democrats received 99 percent of UAW contributions. Obama takes office in January, do you thing he is gonna allow a Bush appointee to remain as the "czar" and not allow further funding of the Detroit 3? I don't think so, further more this is gonna be at a time when you are creating a trillion dollar spending program to create jobs.
here we go again, our fed pouring tax payers' money down the toilet........ no way this thing ends at $15B. they'll keep coming back to fed just like the banks did........does anyone have any plans to buy an american car in the next 5-10years?
Obama is going to come in with his own rules, probably including more taxpayer billions. This mini-bailout is only to hold over the automakers until Obama gets into office.
<img src="http://www.ritholtz.com/blog/wp-content/uploads/2008/12/buy-our-crap.png"/> they're the one's doing the shafting!
I plan to buy another GM car. Hell, my current one is 6 years old and all I've had to do is put a new set of tires on at 45K, new front brakes, a battery and a few oil changes. Most people seem to be unaware that GM quality has risen substantially in recent years and is very close to that of Toyota. As far as the bailout money -- what the automakers are asking for is pennies compared to what the financial institutions are getting. If they renegotiate contracts with the UAW and dealers, the UAW gets rid of the job bank $$ once and for all, I suspect they'll be competitive in the future.
This is a typical govt operation. Really big hard to understand proposals sail right through, but if it's small enough that they(in charge) think they understand it they will nit pick it to death.