The Latest Spin Around Federal Loans for Automakers

By December 15, 2008Economy, Labor Unions

From Bloomberg, “Bush Signals Swift Decision on Funds for GM, Chrysler“:

Dec. 15 (Bloomberg) — President George W. Bush said deliberations by his administration on whether to tap a bank bailout fund to keep General Motors Corp. and Chrysler LLC out of bankruptcy “won’t be a long process” because of the “fragility” of the U.S. automakers.

The president, traveling on Air Force One from Iraq to Afghanistan last night, said he “signaled” his administration is considering using money from the $700 billion fund. Bush said he’s “not quite ready” to announce any rescue plan.

Also from Bloomberg, “GM, Chrysler Failure Would Push Economy Into Abyss“:

Dec. 15 (Bloomberg) — The U.S. risks sliding into a deeper economic slump if General Motors Corp. or Chrysler LLC shuts down because President George W. Bush doesn’t provide short-term financial assistance.

“We’re already in a deep recession in my state, as we are in most of the 50 states,” Senator Sherrod Brown, a Democrat from Ohio said on CBS’s “Face the Nation” yesterday. “And this would just plunge us deeper into economic problems, into a hole that it would take a long, long time to extricate ourselves from.”

A bankruptcy filing by either company would mean production cuts and plant closings, and tens of thousands of workers would be fired, industry analysts say. That would cause many suppliers to collapse, triggering more job losses, straining the cities and states where the car and parts companies operate, as well as federal safety-net programs.

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