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Old 12-06-2008, 03:44 AM   #1
Chuck Jones
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Exclamation BREAKING: Automakers to get $15 billion in federal loans

http://www.autoblog.com/2008/12/05/b...lion-in-autom/


BREAKING: Automakers to get $15 billion in federal loans

Posted Dec 5th 2008 10:12PM by John Neff
Filed under: Government/Legal, Chrysler, LLC., Ford, GM


It's taken two rounds of Congressional hearings, some major pride swallowing and three detailed business plans, but it looks as if the Detroit 3 will be getting the federal loans they need, though not as much they asked for. A deal was reportedly reached between Democratic leaders and the White House that will supply around $15 billion in federal loans to the struggling U.S. auto industry. While General Motors, Ford and Chrysler asked for a combined maximum of $34 billion, the $15 billion is designed to ensure they stay alive until March when the issue will be readdressed with the input of a fresh Obama administration. GM and Chrysler reportedly need around $11 billion to survive the new year, while Ford has said it would only need government aid if one of the other two went under.

We're hearing that a deal was reached between Democrats and the Bush administration late Friday after top Dem. Nancy Pelosi gave in to the White House and its position that the money should come from $25 billion in loans previously approved to help the automakers retool for energy fuel efficient vehicles, rather than drawing the aid from the $700 billion Troubled Asset Relief Fund for struggling financial institutions. In return, Pelosi is seeking a guarantee that the money would be replenished in "a matter of weeks."

Both the Senate and House of Representatives have confirmed they will be meeting on Tuesday to vote on the deal, and it's expected that strong oversight of how the loans are used, whether in the form of an individual car czar or committee, will be part of the final package.

Party on, Detroit.

[Source: Reuters, Photo by Brendan Hoffman/Getty]
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Old 12-06-2008, 04:52 AM   #2
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Only 15 Billion? I thought they were asking for figures of Austin Powers proportion to continue to make substandard products. The one thing I find curious is who is Nancy Pelosi expecting to "replenish the money in a matter of weeks"? Surely not the automakers, especially not in the present market.
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Old 12-06-2008, 08:40 AM   #3
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Just delaying the collapse that's all.
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Old 12-06-2008, 09:43 AM   #4
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well I'm glad they did not get the full amount.

But still shame on them
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Old 12-06-2008, 09:45 AM   #5
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Giving them barely enough to survive and not enough to actually improve their products is not only reckless but a waste of money. No one wants to give them money, but if it is the matter of another $10B to get them securely on their feet and have them start building world-class products again then the loan is well worth the risk.

Aren't we waste $10B A MONTH in Iraq? Having a competitive US auto industry is well worth the money.

Why didn't the financial institutions have to jump through these same hoops to get a $700B bailout???
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Old 12-06-2008, 09:51 AM   #6
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WOW

I find it funny how they need that much to get through the year. If they stopped making ugly ass **** then people may buy them more
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Old 12-06-2008, 10:11 AM   #7
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Quote:
Originally Posted by Hazdaz View Post

Why didn't the financial institutions have to jump through these same hoops to get a $700B bailout???
Because they control EVERYTHING and the politicians don't want to screw with their cash cow
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Old 12-06-2008, 12:09 PM   #8
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Quote:
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Why didn't the financial institutions have to jump through these same hoops to get a $700B bailout???
You don't bite the hand that feeds you.
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Old 12-06-2008, 01:51 PM   #9
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+1 on all previous posts.

This is going to be a very very hard lesson learned and one that my kids will read and study about in school 10 years from now on how there once used to be American automobile makers.
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Old 12-06-2008, 02:03 PM   #10
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Are you kidding me they should just declare bankruptcy in the long run that would make them healthy and get rid of the unions and move thier operations to more company friendly states such as Texas, Arizona etc etc .
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Old 12-06-2008, 02:07 PM   #11
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Quote:
Originally Posted by Daishi00 View Post
Because they control EVERYTHING and the politicians don't want to screw with their cash cow
Quote:
Originally Posted by industrial View Post
You don't bite the hand that feeds you.

Tru that, but I would venture to guess that the auto industry employs more people overall (directly and indirectly).
There should be very tough stipulations to any money we give them, but losing an entire industry for a measly ~$10B is insane. Sure it is a lot of money, but to put it into perspective, one B2 Bomber costs over $2B.
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Old 12-06-2008, 03:05 PM   #12
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Quote:
Originally Posted by Hazdaz View Post
Giving them barely enough to survive and not enough to actually improve their products is not only reckless but a waste of money. No one wants to give them money, but if it is the matter of another $10B to get them securely on their feet and have them start building world-class products again then the loan is well worth the risk.

Aren't we waste $10B A MONTH in Iraq? Having a competitive US auto industry is well worth the money.

Why didn't the financial institutions have to jump through these same hoops to get a $700B bailout???
The only problem is that we can throw as much money as we want at them, but until the structure of how they do business changes from both a management and labor perspective, they're not going to be competitive with foreign manufacturers and they're not going to be able to show major product improvement quickly enough to keep up. Period. We give them 15billion, and that delays their collapse until March, we give them 30billion, that delays their collapse an additional 3 months or whatever at this rate... Throwing money at this problem alone only delays the inevitable if there is no change the major causes of the failure in the first place.

I'm not saying the auto industry isn't vitally important to this country. I'd love to see our US automakers flourishing, and I think they have every capability to... GM has shown a few sparks of brilliance in an otherwise dull model range. The C6 corvette is a bargain supercar that competes with the best of them for half the price or less. The new CTS-V is able to beat up on more expensive European rivals. The Cobalt SS is back and impressing many people on the performance front for cheap, even if folks gripe about the interior a bit. Dare I say, putting some money into the industry could be well worth it for the well-being of the country as a whole, but that kind of investment has to be accompanied by action to loosen some of the red-tape that's choking the industry... It saddens me to see that we'll probably be just dumping money into a failed industry with no structure for improvement to make these automakers competitive again.

Last edited by jhargis; 12-06-2008 at 03:16 PM.
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Old 12-06-2008, 03:12 PM   #13
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Why would Ford be in trouble if GM or Chrysler went under? Last I checked less competition was usually a good thing.
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Old 12-06-2008, 03:18 PM   #14
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I think they idea is that if GM/Chrystler go under, then many of their common materials suppliers and OEMs would go under as well... Kind of a cascade effect.
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Old 12-06-2008, 06:37 PM   #15
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*rental car agency's breathe a sigh of relief*
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Old 12-06-2008, 07:46 PM   #16
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Quote:
Originally Posted by jhargis View Post
I think they idea is that if GM/Chrystler go under, then many of their common materials suppliers and OEMs would go under as well... Kind of a cascade effect.
Yes, and it would have some affect on the foreign manufacturers assembling cars in America as well.

Nobody is really 'going under' anyway. Bankrupt maybe, but they will still be operating. Even Chrysler has profitable parts of their business that will be kept no matter what.

IMO we owe GM a lending hand. Maybe not a handout, but a loan is a-okay with me. They sure came in handy producing tanks and airplanes for us in WW2, it would be foolish to lose such a large chunk of manufacturing capacity, and you can sure as hell bet Toyota wouldn't help us build tanks .
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Old 12-06-2008, 08:26 PM   #17
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Quote:
Originally Posted by Hazdaz View Post

Tru that, but I would venture to guess that the auto industry employs more people overall (directly and indirectly).
There should be very tough stipulations to any money we give them, but losing an entire industry for a measly ~$10B is insane. Sure it is a lot of money, but to put it into perspective, one B2 Bomber costs over $2B.
i dont see how you can compare the auto industry and military spending. its apples to oranges.
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Old 12-06-2008, 08:47 PM   #18
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, and you can sure as hell bet Toyota wouldn't help us build tanks .


Yeah, no.

You can sure as hell bet that the plants that here in the US would be utilized and the tanks would likely last longer, be lighter, have better range and accuracy if built in a Toyota plant by Toyota employees.
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Old 12-06-2008, 08:53 PM   #19
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Yeah, no.

You can sure as hell bet that the plants that here in the US would be utilized and the tanks would likely last longer, be lighter, have better range and accuracy if built in a Toyota plant by Toyota employees.

lol that is pretty funny stuff about having Toyota build them. But this is still crazy, makes you really wonder how far down the economy is going and how long til it comes back around.
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Old 12-06-2008, 09:01 PM   #20
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Quote:
Originally Posted by kirbwrx View Post
i dont see how you can compare the auto industry and military spending. its apples to oranges.
Why? Do we spend US dollars for one and Monopoly money for the other and I didn't know about it?!
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Old 12-06-2008, 10:01 PM   #21
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So how about a quick quiz:

1) Where is Congress getting that money to give to Detroit?
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Old 12-06-2008, 10:11 PM   #22
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Quote:
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So how about a quick quiz:

1) Where is Congress getting that money to give to Detroit?
I can haz cash plates + printing press plz?
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Old 12-06-2008, 10:33 PM   #23
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ben your a dolt

This load will be a first round... until March.
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Old 12-06-2008, 10:36 PM   #24
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Originally Posted by choloman05 View Post
So how about a quick quiz:

1) Where is Congress getting that money to give to Detroit?
Directly? From the Chinese. (We better hope they keep buying our Treasury Bonds...)

Indirectly? From the taxes your kids will eventually pay.
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Old 12-06-2008, 10:46 PM   #25
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I only heard part of the show 20/20 last night. That John Stossel was reviewing this bailout situation. Don't quote me because I might have heard wrong (and I'm feeling too lazy to look it up) but there is something in the union contracts that, when a plant is closed down, the worker get's to collect their salary for 4 years. They basically sit at work and do nothing -- for four years. They also said that the money to pay for that comes from cheapening the materials and build quality - not from cutting head count. The imports never operate like that. Their CEO's are not compensated the same way either. So - you think that this bailout is going to make any difference? With these types of policies? I'm sure the big 3 never doubted getting the money. It would be a national embarrassment to have them fail - and congress won't/can't let that happen. It just makes me sick because it isn't going to change anytime soon. We'll all just keep paying and paying -- whether we're driving the pieces of crap or just paying to have them built - or paying to have the union workers sit and collect a check. It's just plain disgusting ~~and the true national disgrace.
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