WASHINGTON (CNN) - General Motors Corp. and Chrysler will submit detailed restructuring plans Tuesday, while the White House is expected to decide on whether to free up billions more in bailout dollars.
President Obama will release $4 billion more in loans to keep GM afloat, an Obama official and a company official confirm. But the automaker already was expecting that money as part of a commitment the Bush administration made in December.
The more important question is whether GM and Chrysler can deliver viability plans to the Obama administration and convince it that they can survive long term and deserve more government cash down the road.
Ford Motor Co. said in December that it had more cash on hand and that it should be able to avoid tapping into federal dollars unless weak auto sales continue longer than expected in 2009.
On Monday night, GM officials were locked in eleventh-hour talks with their bondholders as well as their union to try to win some last-minute concessions and make the company more viable.
Obama, meanwhile, is creating a task force to oversee the restructuring of the auto industry, a senior administration official said Monday.
WASHINGTON (CNN) - A new national poll suggests that a majority of Americans approve of recent loans to the big U.S. automakers, but fewer than three in ten would support any additional assistance if the domestic auto industry asked for such help.
Sixty-three percent of those questioned in a new CNN/Opinion Research Corporation survey support the roughly $13 billion loan package the White House is extending to American automakers to prevent them from going into bankruptcy, with 37 percent opposing the move.
In exchange for the loans, the deal calls for the auto companies to come up with plans by the end of March that show how they would change their business models to become viable in the future.
But if the auto companies should ask for more taxpayer assistance, the poll indicates that public opinion changes dramatically. Only 28 percent would approve of providing the automakers more money, with 70 percent saying let them go bankrupt.
(CNN) - President Bush announced this week that the federal government will provide $13.4 billion in loans to the nation's automakers.
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(CNN) - The Bush Administration briefed President-elect Obama’s transition team over the last several days about options the Treasury was considering for U.S. automakers, according to a transition aide not authorized to speak publicly, though the administration did not ask for Obama or his staff's approval or opinion on the package or any of its specifics.
The aide pointed out that Obama urged President Bush, in their Oval Office meeting after the election, to grant a short term loan to the auto industry on the condition that significant changes we made toward long term viability.
NEW YORK (CNNMoney.com) - President Bush announced a rescue plan for General Motors and Chrysler LLC Friday morning that will make $13.4 billion in federal loans available almost immediately.
A senior administration official briefing reporters said he expects that GM and Chrysler LLC will be signing the loan papers to access the cash later Friday morning.
The money will come from the $700 billion fund set aside to bailout Wall Street firms and banks in October.
With these loans, Treasury will have committed virtually all of the $350 billion of that fund that it can hand out without additional authorization from Congress. Once Congress releases the other $350 billion, the two automakers will be able to borrow an additional $4 billion.
(CNN) - Michigan Rep. John Dingell blasted “some Southern Senators” Friday for the failure of the auto bailout plan.
“Last night, some Southern Senators kicked American workers in the gut,” Dingell said in a statement released by his office. “Let’s be clear about what happened in the Senate: Senators from states where the international automakers do considerable business unpatriotically blocked a bill that was supported by the White House, that passed the House with a bipartisan majority, and that had the support of 52 Senators.”
Dingell said that Republican critics of the proposal could have had “many reasons for blocking this bill and thwarting the will of a majority of Congress,” although he said they had not allowed their objections over pay and benefit provisions “to be resolved in the proper tradition.”
But, he added, “It could also be that a block of southern Senators saw an opportunity for their states to benefit from the losses of those of us in all parts of the country.
In a statement released by the transition team Friday, President-elect Obama reacted to the failure of the auto bailout last night:
"I am disappointed that the Senate could not reach agreement on a short-term plan for the auto industry. I share the frustration of so many about the decades of mismanagement in this industry that has helped deliver the current crisis. Those bad practices cannot be rewarded or continued. But I also know that millions of American jobs rely directly or indirectly on a viable auto industry, and that the beginnings of reform are at hand.
"The revival of our economy as a whole should not be a partisan issue. So I commend those in Congress as well as the Administration who tried valiantly to forge a compromise. My hope is that the Administration and the Congress will still find a way to give the industry the temporary assistance it needs while demanding the long-term restructuring that is absolutely required."
WASHINGTON (CNN) - The Bush administration will consider other options, if necessary, to prevent a collapse of troubled automakers Chrysler and General Motors, a White House spokeswoman said Friday, one day after the Senate failed to reach a compromise on a bailout plan.
"Under normal economic conditions we would prefer that markets determine the ultimate fate of private firms," Dana Perino said in a written statement.
"However, given the current weakened state of the U.S. economy, we will consider other options if necessary – including use of the TARP program (Troubled Asset Relief Program) - to prevent a collapse of troubled automakers.
"A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time."
NEW YORK (CNNMoney.com) - The future of the U.S. auto industry was in doubt Friday morning after a proposal for $14 billion in federal loans died in a late night Senate vote.
The Senate voted 52-35 to bring the measure for a vote - short of the 60 votes needed to advance the legislation. The failure followed the collapse of negotiations between Senate Democrats and Republicans seeking a compromise that both parties, as well as the companies and the United Auto Workers union, could accept.
The dramatic late-night developments could doom General Motors to a bankruptcy and closure in the coming weeks, with Chrysler LLC potentially following close behind.
WASHINGTON (CNN) - Help may soon be on the way to the struggling U.S. auto industry after House Speaker Nancy Pelosi backed off her opposition to using funds from a fuel-efficiency research program for a bailout, two congressional officials said Friday.
The significant move from Pelosi signals that the deadlock over rescuing Detroit may be over.
Congressional Republicans and President Bush support the idea of tapping the $25 billion advanced technology fund. Two officials familiar with compromise talks told CNN that the working target is $15 billion to $17 billion in bridge loans, intended to fund the struggling Big Three automakers through March.
However, one senior Democratic congressional source told CNN that House and Senate committee staff will meet over the weekend to write a bill to provide $20 billion to $25 billion in assistance to the U.S. auto companies.
This aide said the "mathematicians were working" at how to reprogram the money by reducing a subsidy to come up with a figure that would be available for loans, despite an earlier report that only $7.5 billion was available from the fund passed last year for fuel efficiency research.
This aide said the bill could be on the House floor as early as Tuesday, but thought it was more likely that the Senate would vote on the bill first.