End of the road for U.S. carmakers?
Some analysts suggest failure may not be such a bad thing for Detroit's Big Three. Others, especially Michigan politicians, warn of calamity.
By Ken Bensinger
LA Times
October 28, 2008
Are the Big Three worth saving?
The U.S. auto industry's downward spiral has accelerated dramatically in recent weeks. In a desperate bid for solvency, General Motors Corp. is seeking a merger with Chrysler. Chrysler has talked with Renault and Nissan about partnerships. And now Ford Motor Co., GM and Chrysler -- backed by Michigan lawmakers -- are lobbying Washington to give them cash, implying that failure to provide a bailout could doom the industry to bankruptcy.
Congress last month approved $25 billion in loan guarantees for automakers, and rules for those loans are being drafted. But the companies say they need more -- now. GM, Ford and Chrysler are burning through cash far more quickly than they're bringing it in, sales have fallen off a cliff, and none of them has been able to borrow money in months because of the credit crisis.
White House spokeswoman Dana Perino said Monday that officials at the Treasury, Energy and Commerce departments were discussing aid to automakers. Options may include buying equity stakes in the companies, providing more loans, guaranteeing their borrowing or buying troubled auto loans. Bush administration officials, she added, were "working as quickly as we possibly can" to speed disbursement of the loans.
A Ford Credit spokeswoman said Monday that the company had applied for new short-term loans offered by the Federal Reserve to businesses having trouble borrowing. Recent news reports indicate that GM and Chrysler are seeking about $10 billion in government funds to support their merger.
(Continued here.)
By Ken Bensinger
LA Times
October 28, 2008
Are the Big Three worth saving?
The U.S. auto industry's downward spiral has accelerated dramatically in recent weeks. In a desperate bid for solvency, General Motors Corp. is seeking a merger with Chrysler. Chrysler has talked with Renault and Nissan about partnerships. And now Ford Motor Co., GM and Chrysler -- backed by Michigan lawmakers -- are lobbying Washington to give them cash, implying that failure to provide a bailout could doom the industry to bankruptcy.
Congress last month approved $25 billion in loan guarantees for automakers, and rules for those loans are being drafted. But the companies say they need more -- now. GM, Ford and Chrysler are burning through cash far more quickly than they're bringing it in, sales have fallen off a cliff, and none of them has been able to borrow money in months because of the credit crisis.
White House spokeswoman Dana Perino said Monday that officials at the Treasury, Energy and Commerce departments were discussing aid to automakers. Options may include buying equity stakes in the companies, providing more loans, guaranteeing their borrowing or buying troubled auto loans. Bush administration officials, she added, were "working as quickly as we possibly can" to speed disbursement of the loans.
A Ford Credit spokeswoman said Monday that the company had applied for new short-term loans offered by the Federal Reserve to businesses having trouble borrowing. Recent news reports indicate that GM and Chrysler are seeking about $10 billion in government funds to support their merger.
(Continued here.)
Powered by Blogger
0 Comments:
Post a Comment
<< Home