The Mother of All Auto Loans

[Dec 1, 2008.]

 

Well the Big 3 automakers are standing in line with some other big names to get their piece of the bailout pie.  Maybe they thought they were just going to give the money away without rules or limitations but that surely isn’t the case.

The bail out wasn’t designed to help the auto industry but the big 3 automakers are hopeful to have their collective rears saved by the government.

Recent comments by Ron Gettelfinger, the United Autoworkers chief, were very direct by saying "We cannot afford to see these companies fail," and “ (that the money is) not a bailout, this is a loan — a bridge loan — that will get us through until we can take a longer-term look at exactly what needs to be done in the industry."

Many of those in the Senate making the decision to loan the Auto Industry’s $25 billion loan see it as just throwing money at a business that is set up to fail.  This has prompted a request for a very specific business plan from each GM, Ford and Chrysler.  “We must think like a bank….. before spending the American taxpayers money” seems to be a common understanding in the Senate.  These plans are set to be reviewed by the Senate on Tuesday, December 2nd, 2008.

The Big 3 automakers can expect strict rules and regulations on how they spend their new loan.  On top of controlling costs you can expect the expenses to be monitored quite closely moving forward as well.

While we are waiting to see what happens next we do know that analyst’s from Goldman Sacks and Deutsche Bank both agree that something needs to be done to help these automakers from failing.  If this does take a turn for the worse we could see more substantial problems looming in very near future.

Thanks to the Associated Press and freeP.com for the content for this post

 

About Author:

Brent Lane is a Mortgage Consultant in Roseville, California. He helps homeowners in California with their mortgage financing and writes on his BLOG at www.thelanegroup.blogspot.com