More on the Bailout Plan

The American economy as we know it has drastically changed in recent months. Every segment of the economy has leaked into the next segment. Every aspect of the economy touches and affects other aspects. President Bush recently unveiled a new and very important segment of the bailout plan. The new plans calls for $17 billion to be given to the U.S. auto industry.

A federal aid package has arrived just in time for U.S. automakers. The $17.4 billion package should get them through this rough time and give them a fighting chance for survival. $13.4 billion will be given to Chrysler LLC and General Motors Corp this month and next month. General Motors will get $9.4 billion and Chrysler will get $4 billion. The Ford Motor Co has said that it won’t need immediate help, but would appreciate credit lines established in case of emergency.

Federal relief for the auto industry completely exhausts the first half of the federal bailout package. Additional money could be made available for the auto industry in February. However, that is contingent on Congress’ approval.

Presidential-elect Barack Obama recently told the auto industry that Americans do not have an infinite amount of patience for them. This relief package serves as only short-term loans. If auto makers fail to produce a specific plan by March 31, they will be required to repay the loans immediately.

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

General Motor’s CEO Rick Wagoner eluded to the fact that the American automaker has a lot of work ahead. He also said that “federal loans are a blueprint for the century-old automaker’s next 100 years.”

Ron Gettelfinger, the president of the United Auto Workers union, said (regarding the auto bailout), “This will keep the doors of America’s factories open, keep Americans working and prevent the devastating economic consequences for millions of Americans and thousands of businesses that would have resulted from a liquidation of operations by one or more auto companies.”

The auto industry bailout may have a more powerful effect on the U.S. economy than anything else at this point.

This entry was posted on Wednesday, December 31st, 2008 at 1:54 pm and is filed under Auto Industry. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.