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President Bush:


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WASHINGTON – The Bush administration came to the rescue of the U.S. auto industry Friday, offering $17.4 billion in loans in exchange for concessions from the deeply troubled carmakers and their workers.

"Allowing the auto companies to collapse is not a responsible course of action," President Bush said, citing danger for the entire national economy as well as the carmakers. Bankruptcy, he said, would deal "an unacceptably painful blow to hardworking Americans" across the economy.

One official said $13.4 billion of the money would be available this month and next, $9.4 billion for General Motors Corp. and $4 billion for Chrysler LLC. Both companies have said they soon might be unable to pay their bills without federal help. Ford Motor Co. has said it does not need immediate help.

Bush said the rescue package demanded concessions similar to those outlined in a bailout plan that was approved by the House but rejected by the Senate a week ago. It would give the automakers three months to come up with restructuring plans to become viable companies.

If they fail to produce a plan by March 31, the automakers will be required to repay the loans, which they would find very difficult.

"The time to make hard decisions to become viable is now, or the only option will be bankruptcy," Bush said. "The automakers and unions must understand what is at stake and make hard decisions necessary to reform."

Bush's plan is designed to keep the auto industry running in the short term, passing the longer-range problem on to the incoming administration of President-elect Barack Obama.

The White House package is the lifeline desperately sought by U.S. automakers, who warned they were running out of money as the economy fell deeper into recession, car loans became scarce and consumers stopped shopping for cars.

The carmakers have announced extended holiday shutdowns. Chrysler is closing all 30 of its North American manufacturing plants for four weeks because of slumping sales; Ford will shut 10 North American assembly plants for an extra week in January, and General Motors will temporarily close 20 factories — many for the entire month of January — to cut vehicle production.

Bush said the auto manufactures have faced serious challenges for many years: burdensome costs, a shrinking share of the market and plunging profits. "In recent months, the global financial crisis has made these challenges even more severe," he said.

The president said that on the one hand, the government has a responsibility not to undermine the private enterprise system, yet on the other hand, it must safeguard the broader health and stability of the U.S. economy.

"If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers," he said.

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What they leave out is that the government has the option to take stock in the companies too. Goody for further nationalization... :rolleyes:

The government isn't forcing them to do this. They came to Washington ASKING (actually begging) for a handout. I don't get why people try to make it seems like government is interfering with the free market. Obviously GM and Chrysler would rather risk being nationalized than risk not existing at all. If they aren't upset why should anyone else be?

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The government isn't forcing them to do this. They came to Washington ASKING (actually begging) for a handout. I don't get why people try to make it seems like government is interfering with the free market. Obviously GM and Chrysler would rather risk being nationalized than risk not existing at all. If they aren't upset why should anyone else be?

Of course they aren't upset, we are paying for it.

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The government isn't forcing them to do this. They came to Washington ASKING (actually begging) for a handout. I don't get why people try to make it seems like government is interfering with the free market. Obviously GM and Chrysler would rather risk being nationalized than risk not existing at all. If they aren't upset why should anyone else be?

1. The government IS interfering with the free market. Congress voted it down and Bush did it anyways.

2. Who cares what GM and Chrsyler want--it's on my dime, of course they aren't going to be upset!!! However, I am!

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Instead of doing bailout for all of these corporations that are going to wrecklessly spend the money, here's a though. Since tax payers are footing the bill give it back to the tax payers. Give everyone that filed a tax return last year $50,000 to $100,000, whatever amount that everyone thinks would be sufficient, and let them spend the money as they see fit. Most will do one of a few things A) Buy a house, B) Buy a car, C) pay off debt. The money goes back into the economy, and people get the benefit instead of these crappy corporations that dole out millions in bonuses to CEO's and upper management that doesn't need the money anyway.

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