Meanwhile in Detroit
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http://www.independent.co.uk/news/world/americas/us-car-makers-to-get-loan-aid-worth-174bn-1204481.html
With only a month before leaving office, Bush emphasized that he normally opposed intervening in the free market but that the US economy was too fragile now to allow the two big automakers to go bankrupt and throw thousands out of work. Chrysler, which is the weakest of the automakers, will get $4 billion in initial funding. The company said concessions would happen quickly and it would continue to undertake "significant cost reductions."GM, due for $13.4 billion, said the bailout will lead to a leaner and stronger company. Ford, which says its liquidity is adequate for now, said it hoped to continue restructuring without need for a government line of credit. Conditions imposed by the White House include requiring the automakers to provide restructuring plans by March 31, with an interim report in mid-February. There would also be limits on executive compensation and other perks and the government would receive warrants for non-voting stock. White House Deputy Chief of Staff Joel Kaplan told reporters that the terms of the loan were tough and tried to accomplish many of the goals laid out in legislation that Congress failed to approve earlier this month."I think that they have to be tough if we're to be successful in achieving the restructuring that I think most objective observers would say is necessary for these companies to be viable," he said. Treasury Secretary Henry Paulson will serve as Bush's designee to oversee the loans until he leaves office on 20 January and Obama will be able to select his own designee when he takes office, Kaplan said.Kaplan also said that if the Obama team had a name already in mind to serve as the designee, the Bush White House was open to discussing it.The designee, which for the moment seems to take the place of the "car czar" that some in Congress had envisioned, will determine whether the carmakers' plans to become viable are sufficient.Viability would be mean that the companies must have a positive net present value going forward, which doesn't necessarily mean immediate profitability but would require them to reach that point relatively soon, one administration official said.
Under the deal, GM and Chrysler must cut workers' wages and benefits to the level of counterparts at Japanese manufacturers by the end of next year, a timetable which employees view as unfair. In a direct challenge to Bush's authority, the UAW said it would appeal to president-elect Barack Obama to change the terms when he takes office next month. "While we appreciate that President Bush has taken the emergency action needed to help America's auto companies weather the current financial crisis, we are disappointed that he has added unfair conditions singling out workers," said the UAW president, Ron Gettelfinger.In return for the money, the firms must prove by the end of March that they are financially viable, with prospects for long-term profits.They will have to sell their private jets, halt bonus payments to senior executives and seek government approval of transactions worth more than $100m. They must even tell the treasury of any deviations from expenses policy on minutiae such as travel, Christmas parties and conferences.GM's chief executive, Rick Wagoner, said there had been little room for negotiation after a "stunning slowdown" in business."You wouldn't wish this kind of crisis on any industry, or company, or on our people," he said. "It's been very difficult."
Quote from: siamesedreamer on December 19, 2008, 11:45:56 AMThis bailout is complete shit.Every one of the targets is non-binding. What targets were financial companies required to hit for their several trillion dollars in aid?
This bailout is complete shit.Every one of the targets is non-binding.
The United Auto Workers may be out of the hole now that President Bush has approved a $17 billion bailout of the U.S. auto industry, but the union isn't out of the bunker just yet.Even as the industry struggles with massive losses, the UAW brass continue to own and operate a $33 million lakeside retreat in Michigan, complete with a $6.4 million designer golf course. And it's costing them millions each year.
