12/19/2008
Bush Offers Chrysler and GM $17.4 Billion in Loans
The loans will come from the $700-billion in funds originally set aside for the bailout of the financial industry.
Detroit is breathing a collective sigh of relief today. At a press
conference this morning, President Bush announced that his
administration will give General Motors and Chrysler $17.4 billion in
loans. The loans will come from the $700-billion in funds originally
set aside for the bailout of the financial industry.
According to a report from the Detroit Free Press, terms for the loans
include not only the conditions agreed to by congressional Democrats,
but new limits sought on the UAW contracts, including matching wage and
benefits of foreign automakers with U.S. plants by the end of next
year.
The Free Press report stated that $13.4 billion will be available
immediately to the automakers and $4 billion will be made available in
February, assuming the Obama administration draws down the second half
of the bailout funds. As was the case with the proposed legislation
that did not pass, if the government does not feel the automakers have
made enough progress in their turnaround by March 31, the loans can be
recalled.