U.S. bailout plan nears for Detroit Three
December 8, 2008 by George Skentzos
US Congress has announced that it has reached an agreement on a proposed bailout plan for the Detroit 3 with a package totalling between $15 billion and $17 billion.
The package is designed to provide short-term loans to General Motors, Ford Motor Co. and Chrysler LLC to prevent an industry collapse and allow a comprehensive restructuring of the companies early next year.
The rescue package is aimed at carrying the automakers through until spring, with funding coming from an Energy Department loan program approved in September to help automakers make more fuel-efficient vehicles.
Chrysler LLC has said it needs $4 billion to survive through to March while General Motors requested $10 billion over the same time frame.
Ford on the other hand has said it doesn’t require immediate lines, but instead requested a $9 billion line of credit as a safety net which would only be used if its current finances deteriorated more than expected in 2009 – a move now shared by Chrysler and GM.
However Ford has made similar requests in other parts of the world, having already secured a portion of the $6.2 billion Australian bailout plan, Ford of Canada has also approached the federal and Ontario governments for a USD$1.57 billion line of credit.
A business plan submitted to the US government by Ford said it expects to have profitable or break-even results by 2011.
Congress is scheduled to vote on bailout legislation next week, which would allow the Detroit 3 to maintain operations until President-elect Barack Obama takes office.
Source: Automotive News
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damn i would hav loved to watch holden collapse serves em right for wasting money on SUVS etc [chevy mainly]
whats with all this bailout stuff? ah its too confusing.
Funny thing is O, up until ‘06, the American public wanted SUV’s over almost everything else. Consider the basic facts like F series being the biggest selling truck in the world for most of the last thirty years, the best selling vehicle in the states for 15 of the last 18 years and Ford has just had to restart a third shift on the F150 line due to demand. It appears that no one has told the yanks that they don’t like SUV’s.
Even Toyota has more SUV’s on sale in the states than passenger cars.
The American car industry is a fat and lazy animal on the verge of extinction.
What sort of stupid comment is it to say “i would hav loved to watch holden collapse serves em right for wasting money on SUVS”???Besides Holden being Australian all of the US car makers for decades have been producing ‘yank tanks’, cars that represent the size of the American man’s genitalia. It would appear now the real world has caught up with them and caught them with their pants down big time.
Unfortunately it will take more than a few billion to change such a gas guzzling culture. Even more importantly and unfortunately the impact will be felt here too and may even send the mainstays of the Aussie car industry (Ford and Holden) down the gurgler too. O needs to realise this is not just a case of I hate Holden and love Ford. This has the potential to have a massive impact on the Australian economy and will be far reaching to many support industries costing thousands of jobs. So perhaps O should keep his nugatory comments to himself in future.
They should kill off Chrysler, the rest of the world wouldn’t care if they went belly-up, what awful cars. GM really needs to reduce the amount of brands they have, perhaps sell off a few, like Saab and Buick and kill off others like GMC and Saturn.
Bush should veto this legislation, if it happens to pass the lame-duck Congress.
These industries will never change and renew if the taxpayer constantly subsides their failures.
Quote [Myke]:They should kill off Chrysler, the rest of the world wouldn’t care if they went belly-up, what awful cars.
I would have to agree with you there Myke except for the current Challenger. I think it looks better than the new [Australian designed] Camaro.. it’s just unfortunate that chrysler won’t build it in RHD – to get one over here and get it converted etc will cost approx $200k.. compared to the Camaro which will be built in RHD [as its built on the Australian designed[ VE COmmodore platform and will cost half as much
Holden don’t build SUVs htey only build Large RWD Family sednad and Utes: Commodore Calais and Statesman. Chev GMC Cadillac build SUVs: Yukon; Avalanche; Suburban; Tahoe; Equinox; Silverado Denali; Escalade
Although I think Holden should think about importing thre HH-R Nomad and sell it over here as the Next Generation Sandman. On the TV series Rides They got a couple of US custom car builders to “modiffy” them and they looked cool.
The other thing that might help is if GM employed some designers who can draw cars without using a ruler…. go on give it a go. I mean the Cadillac Sedan is FUGLY!
^I like the look of the new Caddy CTS, its different from any other luxury car, but its definitely love/hate. I saw one on the road yesterday in black, I thought it was nice.
Atleast it drives well too, not just brash with no substance, ie. like the Chrysler 300C.
The fact is the car industry (world wide) and especially in the US has turned so rapidly downward. Its real downturn had only occur in August, but all manufacturers keep turning out vehicles thinking it only a couple of models will be affected. All models are affected.
This has hit the big three in the US but has now spread to other manufacturers like Toyota, Honda, Mercedes Benz, BMW.
The rule for Capitalism was SURVIVAL of the fittest…
Japan never bailed out anyone in the 90’s hence why they’re car companies overshadow almost everyone’s now.
US policies for ya.
Because if the American Manufacturers belly up, the entire economy over there will collapse again.
As much as those companies dont really “deserve” the help… the employment and industry will be an epic disaster that will bury the nation for decades.
What most of the respondants seem to be missing (and those against Capatilism should read this too) is the fact that the main problem affecting the detroit 3 that doesn’t affect the southern state builders, like BMW Toyota & Hyundai, is the labour force cost. THe big three were held to ransom during the 70’s & 80’s by the UAW and are now paying $72.00 /hr with associated health care for thewhole dependant family and retirement benefits for workers (including health care). Compare that to the others who are $30.00 /hr with NO health care and a pension plan similar to our Super and you caneasily understand why the big three are hurting more than the rest of the world. Rest assured if the UAW are not corrected and they do (via the President elect) get into the southern states then Automotive manufacture in America will cease.
I agree with James.. cant just say wish they go under..itll set off a chain reaction reaching much further than just auto industries. But I say, if they want government help, give the CEOs government salaries..like they deserve.