Bush Administration Grants $17.4 Billion Loans to GM and Chrysler
Detroit's Big-Three automakers may have failed to convince the Congress last week to provide $14 billion in loans, but when there's a will, there's a way. In an unprecedented move, the Bush Administration granted GM and Chrysler LLC $13.4 billion in initial government loans to keep the companies from closing. The money that will be made available in December and January comes from the controversial $700 billion fund that was originally made to rescue struggling financial institutions. Furthermore, the two American automakers will receive an additional $4 billion from the fund in February according to a statement from the Bush Administration."Under ordinary economic circumstances, I would say this is the price that failed companies must pay," said President Bush. "And I would not favor intervening to prevent the automakers from going out of business. But these are not ordinary circumstances. In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action."
General Motors
"We appreciate the President extending a financial bridge at this most critical time for the U.S. auto industry and our nation's economy. This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us," said GM in a statement.
Chrysler LLC
Chrysler LLC Chairman and CEO Bob Nardelli said on behalf of the men and women of the company and its extended enterprise, that he would like to thank the Administration and Treasury for their confidence in the Company.
"A letter of intent was signed which outlines the specific requirements (1) that must be achieved," said Nardelli. "These requirements (2...) will require (3...) consideration from all constituents, requiring (4 - and we're not over yet) commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these requirements (5 - Boy, Nardelli does loves to require...)."
Ford Motor Company
Though Ford did not need a loan itself, the company welcomed the action by the Administration to provide emergency funding for GM and Chrysler LLC. "As we told Congress, Ford is in a different position. We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government," Ford President and CEO Alan Mulally said.
"But all of us at Ford appreciate the prudent step the Administration has taken to address the near-term liquidity issues of GM and Chrysler. The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy," he added
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