Bush bails 'em out
Yep, senate Republicans can block congressional action all they want, but they can't stop their glorius leader from bailing out US auto manufacturers.
...but juuust enough to tide them over until Obama takes office...you know, so the big crash and burn won't happen on Bush's watch.
From the New York Times: "President Bush on Friday announced $13.4 billion in emergency loans to prevent the collapse of General Motors and Chrysler, and another $4 billion available for the hobbled automakers in February with the entire bailout conditioned on the companies undertaking sweeping reorganization plans to show that they can return to profitability.
Mr. Bush made his announcement a week after Senate Republicans blocked legislation to aid the automakers that had been negotiated by the White House and Congressional Democrats, and the loan package announced by the president includes roughly the identical requirements in that bill, which had been approved by the House.
http://www.nytimes.com/2008/12/20/business/20auto.html?hp
I still say that even though they dug their own hole with mismanagement and poor decisions, if we don't help them a little now, the economic consequences would be too severe.
"Under ordinary circumstances, I would say [bankruptcy] is the price failed companies must pay," Bush said. But in light of the deep recession, "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.... 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."
They're calling the rescue package a form of government loans, and the money comes with all kinds of strings attached. They have a March 31 deadline to restructure their companies, they have to cut their debt by two-thirds, put limits on executive pay and get rid of company corporate jets. Also, something to make the GOP dance -- they must renegotiate the UAW contract "to make compensation packages more competitive with foreign manufacturers with plants in the U.S."
On the one hand, Bush said that letting the auto companies go into bankruptcy right now would have catastrophic effects throughout the nation. But then he wants them to solve their problems in 3-4 months, or they must go through bankruptcy.
Does he truly believe the economic crisis will be over by then? Or is he just passing the buck to Obama, while giving Republican senators the excuse to block more assistance?
And while they're at it, if we require that workers get paid the same as Japanese plant assemblers, why not require that executives get paid the same as Japanese manufacturer execs? Nobody will like that for sure...but it's a simple answer to the all the bitching about workers getting paid too much...
BTW--Why don't financial bailout rules, for ANY company, put limits on executive pay and scrap all executive bonuses for companies that are NOT profitable. I can't figure out how losing a company's money deserves a bonus?
Clean out the boards of directors too -- no more wealthy, incestous, cliques who reward each other and say to hell with employees.
This bailout irks me...but letting them die is not going to do anyone any good. The ripple affects would be devastating, even more so because automakers are our last big industry. We have nothing else in the economy that we can fall back on.
Now if only the dang banks would give car buyers credit to buy the dang cars that the dang auto industry need so desperately to sell.
