GM, Chrysler Close In On Deal For US Loans, Say Sources

DETROIT - General Motors Corp and Chrysler LLC made significant progress late Thursday on a deal to secure emergency loans as part of a U.S. government aid package, sources familiar with the talks said.

The package would demand sweeping restructuring at the troubled automakers.

Read the whole story here.

Comments

[Teritt]

If people would just put aside their prejudice against Detroit and see how devastating it would be for our economy - not just locally, but globally - you could understand why this is needed. I wouldn't expect that from our power hungry, revengeful Southern Senators, of course, but I hope there are enough less short-sighted people out there to understand this.

[blastocyst]

If this were "Jeopardy" then the 'question' might read like this: How do we as a society contain the bile and vitriol being focused with laser-like precision on a substantial segment of our populace and start a meaningful discussion based upon improving our lot in the global community?

[atlantajoe]

teritt - The southern senators are not any more power hungry than any others. The southern senators see auto manufacturing in southern states doing much better than the big three. Short sighted is ignoring the vast difference in pay and benefits and ignoring it. Short sighted is the union that forces the big three to pay laid off workers 90% of wages. All Corker wanted was a date when the UAW would think of bringing wages in line with the auto plants that do not want Gov't loans.

[Teritt]

Corker was told the date was 2010 but he insisted on 2009. But you might be right, maybe they aren't more power hungry than others. But please don't fall for that 'vast difference in pay & benefits' line. The main difference is in the retiree costs, not the wages themselves. Also, please keep in mind that the Southern states gave a lot of 'incentives' up front to their transplants. You can call it incentives on the front end or bailout loan on the backend, but it's still tax payer money.

[KillTheMessenger]

Aren't you fed up with your own fear mongering?

Where was Detroit when people were asking it to change ten years ago? Or even last year? The problems Detroit is riddled with are not new and there has been a consistent history of avoidance instead of problem solving.

Now you have been handed the check and you want to hand it off to the tax payer, but presto?

Sorry. This tax payer is not buying.

[mikekopac]

GM provides American jobs at Union wages. These workers then pay taxes, which support our social security. The only reason none union auto plants pay comparable wages is because they don't want to be organized.
Let GM fail and watch the downward wage spiral. Of course this too means less social security taxes paid by the remaining foreign employed auto workers. This is not good for any American.

Buy products made in the USA, union made if you can. If everyone did this there would be no recession. Our consumer choices have had a large part in controlling our destiny. We have ignored this and look where we are now.

[concernvoter]

IT SOUND LIKE THE ANSWER IS BANKRUPTCY.

[blastocyst]

If this were "Jeopardy" then the 'question' would most likely read like this: What could the Federal Government, in feckless disregard to the American Auto Industry and the Jobs/Lives dependant upon the Industry, do to insure that an economic event not unlike an all consuming firestorm would touch the lives of nearly every member of the working middle-class?

[KillTheMessenger]

"Working middle class" is a euphemism invented by politicians who look down on you but need your votes.

[johncando]

No ! it is a sigh of relief, my Question would be ,where is the 25 billion prommised? Shelby spend it in the South?

[BPCentrisAmerican]

When ask to comment at the neo-con AEI, Bush talked about the markets and his own legacy in reference to leaving a mess to PE Obama.

A. George your leaving a mess already.

B. In that interview "The Decider" did not mentions the millions of people who would put out work. The man with a soul did not mention the plight of average Americans once, that kind of says it all.

[johncando]

With all the digging Americans are doing , The hole you are in isn't the fault of Bush Buy America and support your country ,The workers not only in GM Ford and Chrysler need it but thay are your neighbors. Japan Korea and Europe have enough population to support themselves. Stop the Bleeding of American Money and assets leaving the country get the manufactoring back by buying American.

[deke4]

Didn't I hear Bush say last night that the "decider" is undecided even after he reached an agreement with Democrats? "Read my lips", you can't trust those republicans to live up to their word. Nor can you trust them to tell the truth (Tilden Affair, wmds, the list is endless). "So what" if a couple of million people lose their jobs. "So what" if those 2 million newly unemployed don't buy products because of loss of jobs. "So what" if this causes people in other industries to lose their jobs because the newly and oldly unemployed cannot buy products. "So what", oh well I suspect you get the drift by now.

[liberal54]

Amen to your post. As someone posted on another thread this administration has always maintained a "let them eat cake" stance. If it doesn't affect me or mine or my social circle, f^ck them. The sad part is that at the end of the day the CEOs of all these companies who have managed their respective organizations into insolvency (be it banking, or autos) will be chaufered home to their mansions to enjoy the millions they sucked off their workers. The little guy gets squeezed out again. Instead, they should all be stripped of their earnings and jailed for anything we could get them on. That would certainly send a message to furture CEOs!

[BPCentrisAmerican]

Remember Bush-Cheney were CEOs, neither very successful, so it's not hard to see were they're coming from.

[BPCentrisAmerican]

The Bush years have lifted the curtain on the neo-consverative ideology which grew out of the Reagan years and it's not pretty. The Bush Administration has tarnished the Republican image as Hoover did in 1929. For history to be kind to the Bush years as it was to Truman, Bush would have had to accomplished something? Ironically he will probably be remembered for this economy more than Iraq.

[schoolmaster]

The whole question boils down to how the companies can sell their cars in spite of getting the bailout loans under whatever terms. The economy is bad. People are loosing jobs. The one who wishes to buy would rather wait for new electric and hybrid cars which are projected to roll out in 2010. So special incentives would be required to sell the existing inventory and the cars manufactured till the new models roll out in 2010. The incentives may mean huge financial loss to the companies. But it is better than getting nothing. May be the new car purchasers now given discounted offer on 2010 cars if they would like to replace with. So the survival cash needs to be obtained from all possible sources including government.

[blastocyst]

If we stay in this recession/depression trough for 36 months or so, oil will be $15/barrel and the government'll have to mandate we drive electric.
Barring a civil war here, gas will cost $0.89 by Spring and they'll need more fans to process all of the sh*t yet to come.

[BPCentrisAmerican]

When the oil companies come round for a handout for subsidies, Congress must tell them to take a hike, money needs to go alternate energy, period.

[08skeptic]

I don't have a Big 3 car anymore having gotten rid of my 5.5 yrs. old Ford when gas was over
$ 4 a gallon last summer. But, I know plenty of people who still own one, whether a Cadillac
or Dodge. if you do have a Big 3 brand vehicle and if you are under warranty, if your brand
of the Big 3 would do a bankruptcy, who pays the local car brand dealer for the service work
under the manufacturer's warranty and who pays the local car brand dealer for that occasional
recall work? Bankruptcy, whether organized or not, is a horrible solution.

I listened to 2 of the local congressmen from our area who were interviewed on the
radio yesterday. One mentioned that GM can get loans from commercial banks now
but only at 20% interest rate (the ultimate high risk pawnshop loan).

[TRichards]

Possible Headline: Bush Katrinas Automaker Bailout

[Libarchist]

Let it fall; the longer the misery continues, the longer it will take -- to recover from the depression that is about to happen

[dashcat]

I am so digusted with auto manufacturers. They knew what was coming when we had the first gas lines in the 70s. So did the government. They had 30 years to come up with an alternative, 30 years to regulate these idiots into making better cars. Wasted time

Now we are at a point where 3 million people are being threatened with unemployment. I don't want to save the big three but we can't let 3 million people be unemployed. If they are the rest of this country will fall like dominos and we will be in a depression.

What do any of you who are against a bailout propose we do with 3 million unemployed people?

[rogerse]

Just like every other company, it will fail and its employees will be laid off, nothing special about that.

[Teritt]

What is special is the number of jobs - not just at the plants - and the local economies & tax bases that will be affected. It isn't like a Sony plant that quits making plasma tvs.

[IowaKid]

Exactly.... If people don't have a job, then they don't have the money to pay, mortgage, credit cards, save, invest, let alone everyday essentials for living. Look at the mess the trickle down effect got this country in.

[000Jade000]

So it sounds like the Bush deal is: either cut the throats of the UAW or else we'll push you into bankruptcy.

The union should not give up ANYTHING more.

[firstandlast]

John Smith started the day early having set his alarm clock (MADE IN JAPAN ) for 6 a.m. While his coffeepot (MADE IN CHINA ) was perking, he shaved with his electric razor (MADE IN HONG KONG .) He put on a dress shirt (MADE IN SRI LANKA ), designer jeans (MADE IN SINGAPORE ) and tennis shoes (MADE IN KOREA ) After cooking his breakfast in his new electric skillet (MADE IN INDIA ) he sat down with his calculator
(MADE IN MEXICO ) to see how much he could spend today. After setting his watch (MADE IN TAIWAN ) to the radio (MADE IN INDIA ) he got in his car (MADE IN GERMANY )filled it with GAS (from Saudi Arabia )
and continued his search for a good paying AMERICAN JOB. At the end of yet another discouraging
and fruitless day checking his Computer (Made In Malaysia), John decided to relax for a while. He put on his sandals (MADE IN BRAZIL ) poured himself a glass of wine (MADE IN FRANCE ) and turned on his TV (MADE IN INDONESIA ), and then wondered why he can't find a good paying job in AMERICA..

This is sad but so true!
Hey, wait a minute .... excessive taxes on big and small business, repressive Senators and Congressmen forcing banks to loan to bad risk customers, and completely out of control unions are what created all this economy in the first place.

[dashcat]

Out of control unions? I say, since it's a global economy, that we should unionize the world. The only way to protect the middle class is to protect workers at all levels. If the top few are going to continue getting 50 million dollar bonuses even when their businesses fail then their employees, across the world, need some protection from their greed.

No one forced banks to create their mumbo jumbo loan schemes. Freddie Mac and Fannie Mae may have been a bad business but these guys screaming for bailouts invented this sub prime leverage voodoo stuff and went out of their way to sell sell sell it to people who wanted a house.

You do realize, I hope, that 90% of big businesses don't pay ANY taxes. I think it's 90% but it could be higher. No taxes at all. None, zero, nada. Because of write offs and loopholes they pay zilch. Small businesses and we, the peop0le, pay the rest.

If the world's workers demanded the same wages we demand then there would be no benefit to moving your company overseas. I am all for white collar unions. Office workers UNITE! Stop these greedy monsters. We outnumber them.

[Teritt]

It wasn't the 'out of control' unions that caused this - it's corporate greed and a lousy government. You can't tell me Congress 'forced' bankers to loan money. Banks loaned it because the more money they loaned, the better their numbers looked to their bosses and it was more money they made in fees. All they worried about was their transaction. If we had excessive taxes, we wouldn't have this deficit.

[mikekopac]

We all should start trying to buy American made products. How do you think we can get people to start? Maybe by goading our friends, and let the circle grow...

[PacificGatePost]

CERBERUS Is Leveraging Billion Dollar Connections In Congress

For Chrysler, if the bailout was Structured effectively, the Cerberus share position would be rendered irrelevant.

http://pacificgatepost.blogspot.com/2008/12/leveraging-billion-dollar-connections.html

The Deal Structure is always, always the key.

[JZ735]

Is that why Chrysler pulled its little close down stunt?...you don't play fair, so we're going home!
I also like Chevy stopping production on The Volt...brilliant move...(!?)

Sorry, you will get NO sympathy for these outdated, 20th Century leviathans here.

[Countdown09]

I heard from a friend GM'S plans are to ramp up their factories in Mexico and ramp down their factories in the US to cut cost. I've been searching the net to find out if this is in fact true???? if it is this by far will be the biggest fraud played on the America people EVER!!

[JZ735]

Fraud is something these b---ards have done for years..they DID produce c--p...if that hadn't been the case, Toyota and Honda wouldn't have made the inroads they did among US car buyers...I personally don't like Japanese cars...don't like the boring, pedestrian designs and the dull rides...I especially dislike Hondas...I did have a Toyota Corolla..it was OK...godawful acceleration, though...my sister's Civic was a nightmare to drive...however, my Mom's old '68 Volvo was a real workhorse...lasted 23 years. Still, I love my Ford Focus...tons of pep, miserly on the gas, and more than ample room with a great sound system...America CAN build good cars...but with management who are living on another planet, and unions choking productivity, it was inevitable the Big Three would get in the fix they are in...the government is also to blame for allowing the SUV to even become a popular car.

[rr52]

Baloney. GM lost it's leadership status only once to the Japanese. Ford currently leads in Consumer Report magazine for quality. We do not make crap cars. Demand drove the market for gas guzzlers bolstered by this administration. The Big 3 knew they had been reneged upon when they scrambled to Washington in early 2007 and got snubbed. The turnaround here in Detroit was dramatic. We're producing really good competition right now. Ford has an electric hybrid that beats the Prius and GM has had hybrid SUV's and trucks for awhile.

This is about the Wall St. crash. Only people in the Detroit area seem to know that our car companies got caught short in their turnaround because of Wall St. Bush started his speech today that our auto industry has been losing profits for years. BS! This is the 3rd cycle like this that I've lived through where demand changes due to oil and cyclical economics force the auto industry to cutback and revamp. Our auto industry always turns itself around--Ford first, then GM, and Chrysler last. This is no different except for Wall St. not loaning to anyone.

I'm sick of everyone making out like we're lagging somehow. The Japanese have clean newer factories helped by the millions in incentives we gave them, while our auto industry got NADA. Even so, Japanese sales are down as well as their profits, yet curiously no one assumes they suffer from poor business management?

[000Jade000]

I think those were some of their plans prior to asking for the bailout. I watched a Senator ask the CEOs about such plans, and one of them played dumb.

[scooperss]

http://www.bloomberg.com/apps/news?pid=20601109&sid=aImmc_hK.uGE&refer=home

General Motors Corp., the biggest automaker in the U.S. and Mexico, increased production of $12,625 Chevrolet Aveos south of the border while seeking a bailout to keep domestic plants from closing.

The Detroit-based company and competitors such as Ford Motor Co. shifted more manufacturing to Mexico this year to capitalize on wages less than an eighth of those in the U.S. and factories that make fuel-efficient models. Through November, Mexican plants turned out 5 percent more vehicles than a year earlier, versus an estimated decline of 30 percent in the U.S.

[KillTheMessenger]

More billions down the chute. And for what? For nothing but the ugly image of the worst US president, ever.