Obama Citizenship

Bailout Update: Feds to Give Loans to GM, Chrysler

By Phil

CNN reports (via redstate.com):

Bush said Friday the federal government would provide loans almost immediately to General Motors Corp. and Chrysler to prevent “an unacceptably painful blow” should the Detroit giants fail.

Bush said in normal economic circumstances he would not intervene to save the automakers but “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.”

Federal intervention is necessary, he said, to give auto buyers faith in their purchases of domestic vehicles.

“If you hear that a car company is suddenly going into bankruptcy, you worry that parts and servicing will not be available, and you question the value of your warranty,” Bush said. …

“If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury,” a White House statement said.

Maybe the folks in DC should realize that filing for bankruptcy does not mean the end of that particular business, per se. It simply means that it has a chance to cut its losses, re-group, and being afresh.

Then again, filing for bankrupty would likely mean the United Auto Workers union would no longer be able to call the shots with management and, as we all know, that’s simply not an option for the current stakeholders at the moment. And that’s just too bad.

-Phil

Full post as published by The Right Side of Life on December 20, 2008 (boomark / email).