The White House plans a $17.4 billion rescue package for the troubled Detroit auto makers that avoids bankruptcy, officials said. President Bush was set to make an announcement at 9 a.m. The deal would extend $13.4 billion in loans to General Motors and Chrysler in December and January, with another $4 billion likely available in February. The deal is contingent on the companies showing that they are financially viable by March. --WSJ
Posted by guest , Dec 19, 2008 9:06AM
Bush sounds like he's been crying.
Posted by guest , Dec 19, 2008 9:08AM
1-just holding in a binger-
Posted by Anal_yst , Dec 19, 2008 9:08AM
"loans," you mean, no?
Guess F was in too good shape to get a piece of the pie, sucks for them.
Bet Feinberg is doin a lil' jig in his office right now, too
Posted by guest , Dec 19, 2008 9:12AM
F was "smart" and mortgaged everything they had when the markets were liquid so they are sitting on a ton of cash.
Actually F made a great move there. I'm not sure they survive, but they should get huge kudos for that cash management.
GM and Chrysler are just a huge mess.
Don't look at this as a loan. This is cash-in-lieu of unemployment and cash-in-lieu of DIP financing.
Here's a clue: if you are an employee of an automaker, parts supplier, or dealer - start looking for a new job. Take classes at night. Order Video Professor and learn how to make a fortune on Ebay. Whatever - just get the hell out of the auto industry.
Posted by guest , Dec 19, 2008 9:16AM
Cool. I can get the used Pontiac Aztek now.
Posted by VOL IS KING , Dec 19, 2008 9:16AM
@Anal_yst:
This is great for Ford. They get all the protection of a bail out without actually having accepted government money themselves. Which means they get to keep their corporate jets if nothing else.
Well played Bill Ford, Well Played.
P.S. Anyone interested in forming a syndicate to LBO Saab? I think the brand has some serious upside potential as an alternative to ostentatious luxury brands in this new post-bling era. Plus there'll be "due diligence" trips to Sweden.
Posted by guest , Dec 19, 2008 9:19AM
how does this help them? They need a DIP facility to get out of existing contracts, if anything.
How are they going to possibly show that they are financially viable by March? this doesnt make sense- we will give you a lifeline under the circumstances you fix something you've been trying for YEARS to fix- and do it in 3 months.
Posted by NAS Keflavik boi , Dec 19, 2008 9:22AM
Hey VOL, what about Volvo? Isn't that on the block, too? Saab's transmissions suck moosecock - I would never buy one. DD trips to Trollhatten would be awesome...
Posted by Tapecracker , Dec 19, 2008 9:23AM
Great temporary, psychological relief for employees; albeit a complete sophism.
Posted by VOL IS KING , Dec 19, 2008 9:34AM
@7:
Are you retarded?
1) the new administration is not going to let the automakers break their UAW contracts.
2) financially viable by march? Half the companies in this country won't be financial viable by march. If they're lucky they might have a plan to become viable by the time Obama finishes his second term. They won't be viable by then, put maybe with 8 years to work on it they can figure out a plan.
@8:
I have a special affinity for Saabs. Plus its smaller. Plus GM is considering just shutting it down and they need the money more.
Posted by guest , Dec 19, 2008 9:35AM
where do they get the money to pay back loans in march if they don't restructure? are they selling any cars?
Posted by guest , Dec 19, 2008 9:35AM
Ok, maybe I am a complete idiot (I'm sure many of my friends wouldn't argue this point) but weren't they already supposed to have a plan? If my memory serves me correctly, they came to DC begging for money in late November and were turned down. But Congress told them to come back with a plan, which they did in early December. And were turned down. Now they get the $$ on a promise of having another plan by March 31?
They will become drains on this economy like no other.
Posted by guest , Dec 19, 2008 9:41AM
The way I heard it:
Bush gives money so they can organize their bankruptcy.
And next year Obama pulls the trigger or gets TARP II approved and sends some cash to detroit.
Obama, the socialist bastard, wont have the balls to pull the trigger. We best hope tarp II doesn't make it past congress.
Posted by guest , Dec 19, 2008 9:43AM
@Vol is king
Are YOU retarded?
1) I said they NEED TO go into 11 in order to renegotiate their contracts. Notice that I didnt say that what WOULD be done.
2) I said they WOULDNT be financially viable by March- "The deal is contingent on the companies showing that they are financially viable by March"
Posted by guest , Dec 19, 2008 9:43AM
@vol king. obviously the helicopter doesn't fly over your head. central banks are printing money. the dollar has strengthened versus the pound, euro, commodities, etc... someone is still demanding the dollar. why not print more up to plaster over detroit. it doesn't seem to be hurting the dollar or treasuries.
Posted by VOL IS KING , Dec 19, 2008 9:45AM
@12:
Yeah they have a plan. In the sense I have a 3 point plan for how I'm going to bang Scarlett Johansson. Its a plan, I wrote it down and everything. That doesn't mean its a reality based plan.
P.S.
Anybody have odds on the likely hood that Obama has or in the future will hit that?
Posted by Anal_yst , Dec 19, 2008 9:46AM
@ 12
March 31, 2024
At this point though, $14bn is a rounding error in the grand scheme of things. It acomplishes the goal of "supporting" the "domestic manufacturing" industry, jobs, blah blah, while not really wasting "too much" $, since there is not an ice cube's chance in hell GM or Chrsyler make an inch of progress by q2'09.
Posted by guest , Dec 19, 2008 9:49AM
The big winner today is Ford (if it can truly resist putting its hand into the govt. coffers). The psychological and marketing boost of not participating in the bailout is worth hundreds of millions alone. All a salesperson has to do to get a win over Chrysler or GM in a deal is merely broach the topic and the sale is theirs.
Superbowl Ad:
(fade in)
[White text on black background]
Wallstreet: "500billion and counting"
AutoIndistry "14 billion and counting"
[red white blue or other suitable patriotic themed background and text]
Your family: 0
Ford: 0
FORD AND AMERICANS:
TOUGH
Guaranteed to be the most talked about and effective superbowl ad.
-C
Posted by VOL IS KING , Dec 19, 2008 9:53AM
@14:
Right my point is UAW contracts should be enforced. The UAW is the only with a brain in Detroit, if anything they should be running the companies. You want to punish them for being good negotiators? Let the bond holders take the dick in the ass.
@15:
I agree, except we can't print as fast as people are non-spending so the repression (depression/recession) marches on. We think holiday sales were decent, but non of those people are going to pay those credit card bills.
Posted by guest , Dec 19, 2008 9:54AM
@18-- hey donny douche, you finally came up with a good idea. cnbc was right to get rid of you for the "I AM" CNBC Gasbags cr@p.
Posted by guest , Dec 19, 2008 9:55AM
@16, sort of...The Chosen One said he was going to quit financially supporting the Republican tabacco industry, errr smoking cigarettes.
With the stress of the next four years weighing on him like King Kong, either
A: He continues smoking
OR
B: He cheats on Michelle.
If he quits smoking and puts up with Michelle (and her Mom who reportedly is moving in the White House), then yes, he is definitely the Chosen One.
No mortal should have to put up that.
Posted by guest , Dec 19, 2008 10:00AM
Sounds like GM and Chrysler are getting thrown little more than a welfare bone. Ford comes out on top - maybe the Nazis will rise again! If someone can now reset the UAW then there might be some hope.
Posted by VOL IS KING , Dec 19, 2008 10:02AM
@21:
Who would rather have slice off your balls Hillary or Michelle. We all know Hillary was prepared to look the other way... I'm not sure Michelle is going to be down with that. She's probably going pick Obama's secret service detail, that dude, needs a decoy POTUS.
Posted by NAS Keflavik boi , Dec 19, 2008 10:06AM
and no friggin way would I get hitched to a gal with a brother as big as Michelle's...
Posted by guest , Dec 19, 2008 10:09AM
@23. I never said Michelle would look the other way. Oh contraire. You're right-Hill definitely looked the other way...terms of the business partnership.
Rather, the Chosen One is going to need stress relief.
Posted by guest , Dec 19, 2008 10:14AM
Note to Messiah:
Check your balls at the door every night and you might get through the next 4 years with your sanity intact
Posted by VOL IS KING , Dec 19, 2008 10:16AM
@25:
yeah I understood you. It was separate hypothetical question. I am just wondering if being married to Michelle Obama would be worth it under any circumstances. And i think that circumstance would be if she were President and you were a house husband. One (monogamous) relationship can only sustain one type-a personality.
Posted by guest , Dec 19, 2008 10:22AM
@26...are you a female??
Posted by guest , Dec 19, 2008 10:27AM
This is good news.
Posted by guest , Dec 19, 2008 11:18AM
lol @ press conference. "Today's casual Friday, but I wore a suit because I thought we might have a press conference. Tony (or whatever his name is) is still wearing the same clothes from yesterday. You know what that means."
Not a direct quote but you get the gist.
Posted by guest , Dec 19, 2008 11:23AM
Question...
Does anyone know what the possible pre-packaged bankruptcy/restructuring of GM would do to the stockholders?
TGFD has some GM and Ford shares.
The Guy from Delaware
Posted by guest , Dec 19, 2008 11:24AM
I think CSFB came up with the effective solution for GM-- pay union workers in GM cars/debtor GMAC debt.
Posted by bmwstox , Dec 19, 2008 11:25AM
This is like the Great American Scam! I knew they would end up stealing taxpayer money. Why should politicians care? It's not there money going to waste -- it's yours. For anyone who ever thought the Gov. was on their side, I beleive this confirms what a scam this all is.
Posted by guest , Dec 19, 2008 11:36AM
@32
That's hilarious. It happens in fin. services, right? It aligns employees interests with those of shareholders (or debtholders, in this case) and both participate in the long-term upside.
Posted by guest , Dec 19, 2008 11:43AM
This is essentially a punt from the Bush administration to the Obama administration. Are things going to be better for the auto industry come March? No, the conditions will likely be worse, but by then it becomes Bam's headache.
Posted by VOL IS KING , Dec 19, 2008 11:47AM
@32:
Uh..... what planet do you live on?
GM employees already buy GM cars (they get a discount) and they get a pension (massive liability issued by GM)
Posted by guest , Dec 19, 2008 11:48AM
TGFD-- I think it means you stand in the back of the line and wait for the crumbs, if you're lucky.
Posted by guest , Dec 19, 2008 12:03PM
@36
they may already buy gm cars but they get paid in cash, no?
they may receive a pension at retirement but they're not holding gmac debt, are they?
what planet do you live on? you should re-read 32's post.
Posted by guest , Dec 19, 2008 12:13PM
@Vol King, 32 here. Not the imaginary one you live on.
1- they buy cars through their own volition at a discount. I'm saying replace the bi-weekly electronic cash transfer with a Ford Ka car or similar.
2- GM pension. Well until GM does a Rupert Murdoch with it, it seems to me there's cash and liquid exchange traded assets there to fund liabilities. It's not being funded by GM debt at the mo.
Posted by Anal_yst , Dec 19, 2008 12:22PM
@ Vol #36
However, their pension is backstopped by the Gov't, the bonus pool from "toxic" assets CSFB (might) have put in the exec bonus pool are (not so much)
Posted by guest , Dec 19, 2008 12:27PM
Sorry I did not mean Rupert Murdoch. I meant Robert Maxwell on 39. Sorry Rupert.
Posted by VOL IS KING , Dec 19, 2008 12:40PM
@ Analyst:
CSFB didn't get money from the Swiss government to prop up its ability to hold on to toxic paper? Looks like a back stop to me.
@36
1) You miss my point part of the compensation is in the form of a debt issued by GM to the workers (a pension). Most of the comp from working at GM is in this form, either health care or pension.
2) A discount on a GM car is essentially a partial compensation in GM cars.
3) obviously you don't want these people to default on their other liabilities and exacerbate the recession so you're going to have to give them some cash.