Detroit’s Big Three were on Capitol Hill yesterday looking for a bigger bailout. They knew the results numbers coming out this morning would be grim and would offer little cheer for the future. The $700 billion in financial industry aid that motored through Congress last month must have flashed a big green light for the auto industry.
Originally, $25 billion in loan guarantees were offered to help U.S. cars get greener. But the car companies say the restrictions on how they can use that money make it less than helpful. In fact, GM and Chrysler might not even pass a financial viability test attached to the funds: If strictly enforced, the test could keep them from getting money at all.
Enter $50 billion more now being sought by the Big Three. Half of this amount is meant to pay for healthcare and other benefits for retired autoworkers. The other half would help to ensure solvency — perhaps making GM and Chrysler healthy enough to qualify for the initial aid.
To put the total proposed package in perspective, it amounts to a rebate of roughly $5,500 on every car, minivan, SUV and crossover that will be sold in the United States this year.
Deals of the day:
* Panasonic said it would acquire smaller rival Sanyo, creating Japan’s top electronics maker and foreshadowing further consolidation in an industry hit by slowing consumer demand.
* In Australia, Independent News & Media’s likely A$555 million ($370 million) sale of its APN News & Media stake is littered with challenges, giving cashed-up buyers such as Seven Network Holdings the upper hand in the deal.
* Russia’s antitrust office has allowed Indian energy firm ONGC to buy London-listed, Russia-focused oil firm Imperial Energy, a spokesman for the office said.
* Shares of Indonesia’s largest coal producer, PT Bumi Resources, opened down almost 10 percent, despite a plan by Philippine conglomerate San Miguel to bid for a 51 percent stake in the company.
* U.S. newspaper publisher and broadcaster Tribune may end up holding 50 percent or more of its storied Chicago Cubs baseball franchise as the credit crunch stalled sales talks, the Wall Street Journal said.
* Daiichi Sankyo, Japan’s No. 3 drugmaker, said it had completed the takeover of India’s Ranbaxy Laboratories, buying a 63.9 percent stake for 199.8 billion Indian rupees ($4.20 billion).
* Microsoft, capitalizing on Google regulatory snarl, is working to steal a deal with Verizon Wireless away from its rival, the Wall Street Journal said.
* Dutch private bank Van Lanschot bought banking and insurance group ING’s private banking operations in Curacao, the companies said.
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11 comments so far
Its really sad to see this concentration of incompetence.
Thess boys get paid millions of dollars to run a company, hire the most expensieve consulatnts and lawyers and still they manage to fail.
And then they come crying for help.
These crooks should not get one dime of taxpayers money.
They should all be fired and be held personal accountable for mismanagement and misconduct.
It is really sickening to see these incompetent plutocrats (including Pelosi)
- Posted by Jack Daniels USAAmazing that the companies who were so confrontational with the EPA now want to be bailed out. The Japanese quietly not only met energy efficiency targets but exceeded them. The Big 3 (we gotta stop using that term) argued and lobbied to make their point that they knew best what Amercians wanted. Looks like they didn’t have a clue. Note to Senior Management…Looks like you got all those bonuses under false pretenses…can we have that money back? No? What a surprise!
- Posted by Ian Shaw[...] previously authorized government-loan program make it less than helpful, Reuters’ DealZone writes. Moreover, GM and Chrysler might not even pass a financial viability test attached to the funds: If [...]
- Posted by Deal Journal - WSJ.com : Afternoon Reading: Humbling the Auto MakersIf the government wants to bail out GM, let’s get double our money by requiring the company to produce only hybrid and electric vehicles going forward. That way our taxpayer investment at least goes towards developing technologies to move us towards energy independence.
-jmanley
- Posted by jmanleysearch more info at http://www.zookfind.com
- Posted by Zookfind[...] See your $25 bln, raise you $50 bln - Reuters BlogsDetroit s Big Three were on Capitol Hill yesterday looking for a bigger bailout . They knew the results numbers coming out this morning would be grim and would offer little cheer for the future. The $700 billion in financial industry aid that [...]
- Posted by Baseball Statistics » Blog Archive » Baseball StatisticsI blame the consumer for buying all the BIG vehicles from ALL manufactures.. So if u got one or did have one of those vehicles then its YOUR fault as well
- Posted by wheatThis crisis reminds me the Great Depression happened on 29th, Oct, 1929 and Roosevelt’s fireside chat.
- Posted by beijing classifiedsI agree, lets make them produce only clean car’s. That we can knock two or three birds out with one move. Energy Independence, more jobs and our Industrial powerhouse intact!
- Posted by DavidLonging for the days when Iacocca’s loan guarantee was a mere $1.5 bil.
- Posted by BrenenBrenen Hofstadter
Who’s next?
The auto lenders raised the required midscore to 700. Then there was a significant drop in auto purchases. It does not take a high I.Q to see that this was predictable. This could and should have been a measured outcome.
I agree that the auto manufacturers are doing more than providing jobs, they are an integral part of the economy. If they want to be bailed out, and the consumer has to pay for it, there should be more regulation.
If the executives were paid an average salary and the bonus structure was revised to repay the bail out, what would be the outcome? I am not saying to pay them less. I am asking that they work smarter with the understanding that their actions effect the entire world.
- Posted by Carolyn Thompson