General Motors and Chrysler Get Auto Rescue Loans! $17Billion

Dec. 19 (Bloomberg) -- General Motors Corp. and Chrysler LLC will get $13.4 billion in initial government loans to keep operating in exchange for a restructuring under a rescue plan announced by President George W. Bush.

A bankruptcy is unlikely to work for the automakers at this time and can’t be allowed, Bush said at the White House.

“These are not ordinary circumstances,” Bush said. “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.”

The money will be drawn from the Troubled Asset Relief Program and the automakers will get an additional $4 billion from the fund in February for a total of $17.4 billion in assistance, according to a statement from the Bush administration. The funds would allow GM and Chrysler to keep operating until March.

Winning the assistance is a reprieve for GM, the biggest U.S. automaker, and No. 3 Chrysler after they said they would run out of operating funds as soon as this month. Bush is stepping in after Senate Republicans’ refusal last week to take up a House-approved rescue raised the prospect of a company failure costing millions of jobs.
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White House pressed from right, left on car rescue

WASHINGTON (AP) — Conservative Republicans admonished the White House Tuesday not to use bank-bailout billions to rescue distressed U.S. automakers, and a key Democrat demanded the government get veto power over the companies' business decisions as a condition of any aid.

The Bush administration said it was still evaluating options and suggested any deal would require major concessions by all sides. Complicating its task, lawmakers in both parties — having failed in their efforts to push a $14 billion auto rescue through a bailout-weary Congress — were pressing for an array of terms and conditions they said should be part of any Plan B.

"We are not going to be rushed into it," presidential press secretary Dana Perino declared.

Only a day earlier, President George W. Bush suggested that a rescue package would come sooner rather than later. "An abrupt bankruptcy for autos could be devastating for the economy," Bush said on Monday. "This will not be a long process because of the economic fragility of the autos."

Still, conservative Republican lawmakers, many from Southern states that are home to Japanese auto plants, wrote to Bush asking him not to use one of the most readily available pots of money — the $700 billion Wall Street rescue fund — to help the U.S. carmakers.

And the White House and Treasury Department were in talks with Sen. Bob Corker, R-Tenn., who has been pressing for big union concessions in exchange for rescue money, on the terms and structure of a possible bailout, said a senior GOP congressional aide.

Corker came close last week to striking a deal with the United Auto Workers union for a $14 billion bill that would have forced the carmakers to bring their wages and benefits in line with those of Japanese auto companies in the U.S. by a specific date in 2009. The measure collapsed after the UAW refused to agree to wage cuts that quickly. The new contacts with the administration were disclosed on condition of anonymity because the aide was not authorized to divulge them.

Rep. Barney Frank, D-Mass. weighed in as well, urging Treasury Secretary Henry Paulson to adopt the accountability provisions included in a House-passed auto bailout bill — the product of a deal with the White House — as a condition of any bridge loans to U.S. automakers. That measure would have given a Bush-appointed overseer say-so over any major business decisions by the automakers while they were taking advantage of federal aid, including the power to nix any transaction of $100 million or more.

"Given the serious mistakes that senior auto industry executives acknowledge they have made in the past, such safeguards are absolutely necessary to ensure that taxpayers are protected and that the retooling of this critical industry proceeds as quickly as possible," Frank wrote to Paulson on Tuesday.

GM and Chrysler have said they will run out of cash within weeks if they don't get help. Ford Motor Co. has said it has enough cash to survive 2009.

Perino said the administration was still working on details of the package, which could reach $15 billion for General Motors Corp. and Chrysler LLC.

She said concessions had to be made in exchange for the money.

"I don't think that there's any possible way that this president would agree to allow taxpayer financing to go toward firms that are not willing to make tough decisions to become viable and competitive in the future," she said.

Bush said Tuesday that his administration was "considering all options" for helping the automakers, arguing that the already distressed economy could slide further into recession without prompt action.

"What you don't want to do is spend a lot of taxpayers' money and then have the same old stuff happen again and again and again," Bush told CNN in an interview. At the same time, he said, "we're trying to get this done in an expeditious way."

The administration indicated it would extend a helping hand to the domestic automakers after an aid effort died in Congress late last week. The White House had wanted Congress to act.

The timing and details of Plan B — the Bush administration stepping in to help the automakers directly — remain in flux. In the absence of action, lawmakers were eagerly offering up their counsel, particularly on the idea of using the $700 billion financial industry rescue fund, known as the Troubled Asset Relief Program, to help U.S. automakers.

"Congress never voted for a federal bailout of the automobile industry, and the only way for TARP funds to be diverted to domestic automakers is with explicit congressional approval," wrote 26 GOP lawmakers, led by Rep. Jeb Hensarling of Texas.

Seven Senate Republicans led by Sen. Jim DeMint of South Carolina fired off a similar missive saying that without restructuring, "we do not believe any amount of money will succeed in saving these companies."...More

What is Bankruptcy Mean For GM and Chrysler?

Will here is the description of Bankruptcy.

Bankruptcy has become fairly common in today's economy. Let's discuss what each kind is.
First there are two kinds of Bankruptcy. Chapter 7 and Chapter 13.

In Chapter 7 you are basically “restructuring” you debt. Big companies do this all the time. Their assets are frozen and the judge gets to decide how and when they pay back the outstanding debt they owe. Usually a lot of the fees and interest is taken off the account and they start with a clean slate. The company keeps all of the assets most of the time.

Now Chapter 13 is a little different, normally for individuals. In chapter 13 you don’t get to keep the assets if they are “secured debt” meaning that something of value backs the loan. A home mortgage for example is a secured debt, if you stop making the payments the bank takes your home, really quickly sometimes. For a business it might be a loan on a building or car or even computers or furniture. Anything that the bank could take back and sell. Therefore anything can be taken in a chapter 13 if it is a secured debt.

If it is not a secured debt, like anything you charge on your Visa card, the creditors cannot take it a way from you. So when you are dealing with a credit card, bankruptcy is a different story. There is no way to tell if that $1000 on your Discover card is a bunch of cheeseburgers, or the new living room set you just bought. So rule of thumb, if you buy it on plastic you keep it.

You should contact an attorney for a consultation if you are thinking about filing. There is are lot of “do it yourself” kits out there. But you need to make sure that it is done correctly if you are going to do it. Make sure it is a clean slate, with nothing left out for you to have to worry about.

Your credit is going to be (and probably already is) BAD, so make sure that you get everything taken care of.

You can only file for this protection every 7-10 years in most states. So if you are in a position where you need to file make sure and change your habits! Don't ever do this again.

Also be aware that filing adversly affects other areas besides getting a loan. For example many employers will check your credit before you are hired. If your credit is bad, you might be turned down. Employers sometimes see this as irresponsibility, dishonesty, or poor money management.

In addition insurance rates, apartment rentals, etc.

This decision will affect most areas of your life.

But if you follow the debt steps you should not ever need to use this extreme measure.

Below you will find some steps from wikihow on how to file bankruptcy. Make sure to follow them.

White House mulling TARP funds for automakers

Harry Stoffer
Automotive News

WASHINGTON -- The Bush administration, signaling a possible shift in policy, will consider using money set aside for the rescue of financial institutions to make emergency loans to automakers, the White House said this morning.

The word comes in the aftermath of stunning rejection by the Senate last night of legislation to provide $14 billion in emergency loans to prevent the collapse of General Motors and Chrysler LLC.

President Bush and his appointees have resisted using any of $700 billion approved in October for financial institutions to provide industry help under the Troubled Asset Relief Program, or TARP. Democrats contend the failure of one or more automakers would have widespread devastating economic effects.

It's unclear when the White House or U.S. Treasury will make a decision about using TARP funds for the auto bailout.

Of the first $350 billion in the TARP fund, about $15 billion has not yet been committed, wire services reported this morning.

That happens to be the amount GM and Chrysler say they need to survive to the end of the first quarter of 2009.

To access the second $350 billion, the administration must seek fresh approval from Congress.

U.S. Sen. Carl Levin, D-Mich., said the effort to provide the emergency bridge loans remains "very much alive."

"I am encouraged that the White House said today that they will consider other options to assist the auto companies, including use of the TARP program," Levin said in a statement.

"Use of TARP funds is the fastest, most feasible, most immediate and most certain approach to provide the emergency bridge loans needed by the auto companies...more

It's Detroit Against The World! Turn in your foreign car or be boycotted!

Yes, now we know how little the rest of America cares for Detroit, Michigan and The America Auto Industry! We have been beat up time and time again by the US media and international media, but never did i think Americans of the South and West hated us so much.

What is more important for Detroit and Michigan is that we remember who we are! We are the salt of the earth hard working people, we are the people that built the tanks and planes that crushed the Nazi regime from taking over the world, we have made the vehicles and engines that have been used to advance our society.

We may dwindle and fade from our glory years, but with the right vision we will rise again.

We must begin a new era of renewed commitment of quality, efficiency and innovation.
We should not strive to be on par with the Japanese automakers, we need to beat them in every aspect of the game.

A large part of their success is because the Japanese Government fully backs the Japanese Autos! We need the legislation in place to make it more difficult for Japanese and foreign transplants to use our tax dollars to fund their plants and ship their profits back to Japan.

You now see how crucial the America Industry is to the foundation of this country.

We must ask and demand all those who live in Michigan, Ohio, Indiana, Illinois and other major American Manufacturing States to return their foreign cars.

If you know of Television or radio personalities who drive foreign cars don't watch and don't listen to them.

If you do watch or listen to them this is only reinforcing their belief that driving foreign cars doesn't matter. The same for shops,restaurants and any other establishment you spend your money at.

If they do not support you and your family, don't support them!

Gm Chrysler News

The Car Czar Wanted! Auto Czar To Control The Big Three!

Wanted: Car Czar to Revive an Auto Industry
If the deal between congressional Democrats and the White House to give Detroit's automakers $14 billion in emergency loans becomes law, President Bush will appoint a car "czar" who will be responsible for overseeing how the money is spent.

HELP WANTED: Someone who knows how to spend $14 billion.

If a bill to provide $14 billion in emergency loans to the Big Three U.S. automakers is passed by Congress and signed by President Bush, a government "car czar" will given the task of handing out the taxpayers' cash.

The czar will also have the power to force any of the Detroit carmakers into bankruptcy in the spring if they haven't cut quick deals with labor unions, creditors and others to restructure their businesses and become viable.

But some lawmakers think a "czar" should have more power than that.

"The car czar that they put in this bill, first of all, doesn't have a lot power -- has a lot of ability to suggest things -- but doesn't have enough power to cause the restructuring," said Sen. John Ensign, R-Nevada, who opposes an auto bailout and would prefer to see the companies in Chapter 11 bankruptcy....More

The Auto Car Czar-GM Chrysler Merger-bankruptcy

Under the purposed deal the " Car Czar " will make all the decisions! The "car czar" will have the power to force U.S. automakers into bankruptcy! He will be incharge of distributing the $15Billion as he see's fit! He could also force the GM Chrysler Merger!

This is the Government taking over GM and Chrysler or the New GM Chrysler Company! Stay tuned this is going to get uglier!

Car Czar-Deal reached in principle on $15B auto bailout

Deal reached in principle on $15B auto bailout
By JULIE HIRSCHFELD DAVIS and KEN THOMAS

WASHINGTON (AP) — A government "car czar" with the power to force U.S. automakers into bankruptcy would dole out $15 billion in emergency loans to the failing industry under an emerging deal between the White House and congressional Democrats.

Officials struck an agreement in principle on the measure Tuesday and hoped to finalize it and schedule swift House and Senate votes as early as Wednesday. Money could be disbursed within days to cash-starved General Motors Corp. and Chrysler LLC, while Ford Motor Co. — which has said it has enough liquidity to stay afloat — would be eligible for federal aid.

All three would have to negotiate with labor unions, creditors and others and submit blueprints by March 31 to an industry czar named by President George W. Bush showing how they would restructure to ensure their survival. If not, the emergency loans would be revoked, the companies cut off from further federal help, and the government overseer could order his own overhaul, including forcing them into bankruptcy.

After days of marathon negotiations over the plan, congressional aides and White House officials were still fine-tuning legislative details of the agreement. It could face substantial obstacles from Republican lawmakers, who remained skeptical of the White House-negotiated plan.

A group of conservatives led by Sen. John Ensign, R-Nev., who has threatened to block the measure, planned a midday news conference Wednesday.

As the measure took shape Tuesday, Sen. Mitch McConnell, R-Ky., said he was concerned that Democrats were proposing a package that "fails to require the kind of serious reform that will ensure long-term viability for struggling automobile companies."

With their approach, "we open the door to unlimited federal subsidies in the future," McConnell said.

Getting 60 votes for an agreement, with many senators expected to be absent for the emergency, postelection debate, could be tricky.

Sen. Carl Levin, D-Mich., an ally of the auto industry, said, "This gets us to the 20-yard line, but getting over the goal line will take a major effort, particularly in the Senate."

He called for Bush and President-elect Barack Obama to lobby personally for the auto bailout.

A breakthrough on the measure came when negotiators reached a compromise to require the czar to revoke the loans and deny any further federal aid to automakers that don't strike restructuring deals by next spring. Democrats had proposed giving the overseer that option but not requiring it.

"A great deal of progress has been made on auto legislation that will protect the taxpayer and ensure that short-term financing is available only to companies prepared to undertake the dramatic restructuring necessary to become viable and competitive," Dana Perino, the White House press secretary, said late Tuesday.

One potential stumbling block remained. Democrats' were still refusing to scrap language, vehemently opposed by the White House, that would force the carmakers to drop lawsuits challenging tough emissions limits in California and other states.

That measure "kills the deal," said Dan Meyer, Bush's top lobbyist.

Senior Democratic aides acknowledged as much Tuesday and said they expected the provision to be dropped.

Environmentalists, who count House Speaker Nancy Pelosi, D-Calif., among their closest allies, already were irate that the bailout uses money set aside for a program to help the automakers finance the retooling of their factories so they could produce greener vehicles.

Another remaining hang-up was over ensuring that Cerberus, the private equity firm that owns Chrysler LLC, would reimburse the government if the auto company defaulted on its loan, said a congressional negotiator who spoke only on condition of anonymity because he was not authorized to disclose details of the emerging deal.

The measure would attach an array of conditions to the bailout money, including some of the same restrictions imposed on banks as part of the $700 billion Wall Street rescue. Among them are limits on executive compensation, a prohibition on paying dividends and requirements that the government share in future profits and taxpayers be repaid before any other shareholders.

Also included in the plan is a requirement that the carmakers taking federal aid get rid of their corporate jets — which became a potent symbol when the Big Three CEOs used them for their initial trips to Washington to plead before Congress for government assistance.