See your $25 bln, raise you $50 bln
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.