Detroit automakers to lobby Congress for $50 billion in loans
What's another $25 billion between friends? That's the argument General Motors, Chrysler and Ford's Congressional lobbyists will be making in the next few months for a $50 billion loan from the federal government.
Originally, Detroit's Big Three were after $25 billion in loans from the Feds, but after lawmakers authorized a loan in last year's energy bill, the domestics now want Congress to grant loans up to $50 billion over the next three years.
The loans would carry an interest rate of around four to five percent, with $25 billion being available in the first year, another $15 billion in the second year and the final $10 billion in the third.
GM, Ford and Chrysler contend that the low-interest loans would be used to build more fuel-efficient vehicles, including hybrids and electrics, thus reducing the U.S.'s dependency on foreign oil, not to mention making all three automakers more competitive in a market that no longer favors big trucks and SUVs.
Mark Fields, Ford's President of the Americas, likens the
[Source: Detroit News]
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Reader Comments (Page 1 of 2)
Frank 8:37AM (9/08/2008)
Before people start saying its a bailout, its a loan - a low interest loan. Someone, an idiot, is still going to say bailout, guaranteed.
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Torqued 9:08AM (9/08/2008)
It's both. They're asking for the US govt to loan them $50 billion at an artificially low interest rate... to help bail them out of the mess they're in.
I hope these companies can turn it around and become dominant again. Any American who wants them to fail is a fool.
Sean Flanagan 9:10AM (9/08/2008)
It's a bailout because the banks won't fund them and it's unlikely that with the way they've been running things that they'll be able to actually pay the loans back.
Tim 9:38AM (9/08/2008)
ITS A BAILOUT - These loans will never be paid back. They lost more than 20 billion in the past three months Its not 1980 no more. This will provide 3 more months of CEO pay and bonuses in the millions. The three stooges hold this green halo over their head and then make hybrid platinum escalades and durangoes and the taxpayer falls for it every time.
Frank 12:17PM (9/08/2008)
im aware its 'not 1980 no more' ... let them fail and see the havoc wreaked on the US economy as the failures trickle down throughout the supply chain. thats a lot of jobs, a high percentage of the GDP, and an important sector if the government is serious about becoming energy independent.
Quan 7:19PM (9/08/2008)
Frank, everyone already realizes that if the three fail it'll be a disaster for the US Economy. However, that doesn't make this any less of a bailout. When the government is giving your company money for anything, at lower than normal interest rates because of the difficulties you're having in the market, they are bailing you out.
Allan 8:43AM (9/08/2008)
Really? $50 billion?
Between the three of them, they should be able to lose that in 6 months, no problem!
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Kevin 8:46AM (9/08/2008)
Why ask Congress, why not go to the New Big 3 - Honda, Toyota, and Nissan. Detroit is closed, turn off the lights if there are any left on the way out.
Kevin
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2007RC46SP2 8:57AM (9/08/2008)
its not a bail out if they pay it back. but what happens in 3 yrs when they fold up and cant pay it back. thats when we flip the bill.
why do they need congress to give them the money. how about they go to some major banks and ask for the same deal.
might turn into a fannie/freddie deal.
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Tourian 9:00AM (9/08/2008)
"GM, Ford and Chrysler contend that the low-interest loans would be used to build more fuel-efficient vehicles, including hybrids and electrics, thus reducing the U.S.'s dependency on foreign oil [...]"
And all this time I thought going green was for the enviroment and not just politics... my eyes have been opened!
/////sarcasm/////
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Menice 9:04AM (9/08/2008)
cool now we can have more dumb flex fuel Tahoes!
but yea, they're gonna whiz through that like a rich kid spending dads money freshman year....who wants a beer Fields is buying!
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Jim 9:07AM (9/08/2008)
Funny how they term it a loan, while anyone who has seen the whole fiasco thats the Bear Sterns, Fannie Mae, Freddy Mac clusterf*** knows full well, its a bailout.
You know what you should do with the money GM, heres what you should do.
Kill Pontiac, there is NOTHING in that stable thats decent anymore. Only the G8 and G6 is a unique vehicle, the G5 is a Cobalt and can die, the Vibe shares its sales with the Matrix so its not making GM any cash, the Grand Prix needed to die back in the 90's, and the Solstice can easily move to Chevy, and well sorry GM SUVs are not making you any cash anymore.
Move the G8 and G6 with new styling to Saturn, kill the Sky and that upper end SUV, reduce cost of ownership for the planet cars (sorry just cause their German doesnt mean we are willing to pay 1000-2000 more for a lower end vehicle, ask VW whose sales increased when they stopped kidding themselves and lowered their prices) FIX THE ASTRA, it didnt need a refresh for 2010 it needed a radio that ACTUALLY WORKED, and a engine and transmission that wasnt from the SC/SL developed for a car released in 1990 that weighed almost 800 pounds less. Not even your POS Aveo should have less than a 5 speed auto.
Oh and stop kidding yourself with Onstar and drop everything but 1) emergency roadside assistance, vehicle recovery, crash response, diagnostics, and door opening and charge 100 bucks for al of that. Get a sync like system in those cars available on ALL models for a decent price, hell your so fond of white plastic (gag Volt) get APPLE to help you with it! An AUX jack and no bluetooth when EVERY OTHER MAKER has them is just stupid.
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BoneHeadOtto 9:58AM (9/08/2008)
as a person who would never buy a domestic i have to say that Pontiac appeals to me the most. and perhaps opel i mean saturn. The Vibe is the best car in the pontiac stable and homestly it would be better with a GM 4cylinder in it instead of that toyota 2.4L pig. Gimme a vibe with the 2.0L turbo and ill happily purchase a GM.
mike 9:12AM (9/08/2008)
" This is benefiting Main Street, the working men and women."--------------You mean UNworking men and women, because you just fired them.
Don't you LOVE capitalism, Privatize the gains, Socialize the losses.
Any bailout should include an increase in MPG that is above and beyond the current one and a mandatory recycling program that will have each automaker recycle its cars, the way it is in Europe.
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sold2early 9:29AM (9/08/2008)
Hey, why stop with the Big 3? Why don't they go ahead and give cheap loans to all of the other poorly managed U.S. companies with bad credit ratings?
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iSpec 9:25AM (9/08/2008)
Do it! The Koreans (Hyundai/Kia) and Toyota from Japan have received bailouts...well..the Toyota Prius was given huge money by the Japanese govt for R&D so let's just level the playing field. And who cares about tax money being used, there's more money being thrown around that it doesn't even matter anymore.
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mike 9:33AM (9/08/2008)
Detroit was given money by Fed to make an 80MPG car, but they chose not to build the car.
Google, Clinton GM 80 MPG
why not the LS2LS7? 11:56AM (9/08/2008)
Actually Mike, GM and Ford made cars, and both got the money. And they were both unable to sell theirs, because they made Diesel hybrids and the EPA changed the regulations so that a Diesel could not get any hybrid tax advantages (because they weren't clean enough at the time), even though it had big fuel burn advantages.
A classic case of the government not synchronizing with itself, they paid for a car to be built and simultaneously made the car useless.
http://en.wikipedia.org/wiki/Partnership_for_a_New_Generation_of_Vehicles
REF 4:26PM (9/10/2008)
I don't recall Hyundai/Kia ever receiving bailout money?
Todd 9:39AM (9/08/2008)
You can sugar coat it all you want - it is still socialism!!
For all our talk of us being a free market economy, obviously we are really a socialist ( approaching outright communist ) economy when cornered. A free market economy, pure capitalism, would let failed companies die.
In countries like China, France, etc. are all government underwritten "co-ops" that do not need to show a profit because they know they can just ask the government for money.
At least in other socialist countries, they don't have this hypocritical double standard where corporation keep their profits, but push their losses onto the tax payers ( Bears Stearns, Fannie Mae and Freddie Mac and now GM and Ford ).
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