BREAKING: Automaker bailout agreement reached in Senate, still not a sure thing [UPDATE]
by John Neff on Nov 20th 2008 at 1:33PM 
CNBC is reporting that four U.S. senators have reached a bipartisan agreement on a bill to help the Big 3 automakers in Detroit. Those senators include Michigan Democrats Carl Levin and Debbie Stabenow, Ohio Republican George Voinovich and Missouri Republican Christopher Bond. Details of the bill are not yet available, but a news conference is scheduled for 2:30PM EST, at which time we should learn more. It will likely be some compromise between the Democrats' wish for taking an extra $25 billion out of the $700 billion financial bailout fund and the plan supported by the White House that would allow automakers to use the already approved $25 billion in low interest loans for anything they wanted rather than just investing in green technology. Still, CNBC says the bill faces some big procedural hurdles, not the least of which is that senators want to go home soon for the Thanksgiving holiday. Trying to squeak in a vote before the break will be tough, and lawmakers may have to reconvene in December to vote on the bill. Plus, there's no guarantee the House of Representatives will pass it even if the Senate would.
Regardless, Wall Street seems pleased with the news as shares of General Motors and Ford have jumped, with the latter hitting as high as $4 after ending the day yesterday at $2.79.
Stay tuned, we'll bring you all the details on the new automaker bailout bill when they become available. Thanks for the tip, everyone!
UPDATE: Senate Majority Leader Harry Reid and House Speaker Nancy Pelosi have held a press conference in which they said that the compromise agreement reached by the above senators would not be approved, and instead that Congress will come back in December and hold more hearings with the CEOs of the Big 3. Each automaker has been charged with the task of showing "accountability and viability" at this second round of hearings, specifically telling Congress exactly how they plan to use any bailout money they might be given.
UPDATE 2: For details on the compromise bill, click here.
[Source: CNBC]
Reader Comments (Page 1 of 4)
JN 1:45PM (11/20/2008)
I'm not holding my breath.
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holden 11:57PM (11/21/2008)
Here's a different perspective on Detroit:
http://www.lasvegassun.com/blogs/bloggity/2008/nov/21/ford-gm-and-chrysler-need-pit-stop/
Brett 1:45AM (11/27/2008)
Look. With gas prices on the rise GM and Ford did not even consider the fact that their main selling vehicles which are truck and suvs were going to need a major overhaul. They refused to make drastic changes and imports said America won't do it, so we will. Imports made the changes that Americans wanted and are now leading because of it. GM and Ford have made nothing but crap for the past several years. Oh Ok, what about the cobalt, it's a rebadged Australian Holden. So what about the Saturn Aura, it's a rebadged Opel. In basic terms, the only good domestic vehicles aren't even domestic. They refuse to change to what the american buyers want and now they shall burn, because they understood what they had to do and NEVER DID IT! NO BAILOUT EVER!!!
John 1:47PM (11/20/2008)
It will happen either way, now or when Obama takes over.
It's better to loan them the money now than to charge off billions in debt to the taxpayers if they go bankrupt.
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ScionSouth 4:26PM (11/20/2008)
Are we really supposed to believe this will be the last time they will want a hand out from us? Failing is the only thing they have been good at over the last 20 years. Why should we expect it to change?
Let them go down now, so we don't have to revisit this in a decade.
happy_penguin 4:41PM (11/20/2008)
"ScionSouth"
Nice name since that's where Scion ranks on the JD Power Vehicle Dependability study. WAY SOUTH!!
bill jackman 6:58PM (11/20/2008)
Dave Brubeck sucks.
bill jackman 7:48PM (11/20/2008)
Happy_penguin, why don't you go pack up your crap and flame people on another auto board? And to close the loop, Brubeck was a jazz carpetbagger who was the Kenny G of the 50s and 60s. He may have worked himself up to respectability through sales, but put him up against a McCoy Tyner or Wynton Kelly or Red Garland any day, and maybe you'll get wise ... When you flame actual users here, it's in poor taste. Apologies to the rest of the folks here who didn't come to see this sideshow.
John R 7:36AM (11/21/2008)
Hey! "Take Five" was pretty good! But I guess that's more thanks to Paul Desmond than Brubeck.
In any event happy penguin is an insult to Brubeck and Jazz at large.
Jason 1:48PM (11/20/2008)
Awesome... more re-distribution of wealth. Socialism rocks.
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Aki 1:56PM (11/20/2008)
Don't you know, socialism is the new democracy. You're not for change--or for America--if you're not for rewarding the bad decisions of corporate America.
TJ 1:59PM (11/20/2008)
hey, where is MY piece of someone else's pie? I'm hungry.
sasha 9:03PM (11/20/2008)
Aki, why don't you indulge me on "corporate" Japan and it's free markets?
Jake B 2:48PM (11/20/2008)
It is SO stupid to say that it is all the fault of our automakers. What about Japan subsidizing Toyota's hybrid technology. What about Japan manipulating the yen to create favorable market conditions for THEIR companies. What about the credit crisis caused by the mid nineties Democrats in power.
America needs to grow up and realize that it isn't just corporate greed that created this situation. On another note, Pelosi is the wicked witch of the west.
noz 4:41PM (11/20/2008)
Socialism is the problem...it's the people in his country that is the problem.
Wake up.
Aki 6:03PM (11/20/2008)
People keep bringing up Toyota and Japan's purported billions and aid, and it's stupid. Show me the agreement where the govt. gave them $25 billion. Show me how Japan "manipulated the yen" to help Toyota, which is laughable (why wouldn't US do the same if it was that easy?) That's right, you can't.
http://www.cnn.com/2008/US/11/20/honda.town/index.html
You're right, it's not just corporate greed, it's personal greed. Greed of Gettelfinger who thinks the UAW doesn't need to concede an inch, even in spite of the fact that the company is on the verge of going bankrupt. It's political greed, lackeys who have to stand up for unions because they know their reelection is on the line.
why not the LS2LS7? 1:53PM (11/20/2008)
Great graphic. Still against it.
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BrianFL 1:56PM (11/20/2008)
Story goes like this:
The D3 on a quality turn around plan with new product and a new labor contract on the horizon. With the economy good with people thinking their homes are worth a ton of money and celebrate. People buy SUVs and CUVs and demand more. Its all the rage! Even import companies jump on the SUV craze as well. Things are great. Then the unregulated housing market collaspses. Unemployment begins to rise hurting all car sales. Stock investors decide the safest place for their money is in the commodity market. This results in a surge in crude oil prices. As gas rises SUVs are collecting dust on dealer lots and lease returns on them begin to come back at losses. The public blame only the D3 for supposesly forcing them to buy SUVs and begin on a import craze. Then big time Wall Street firms begin to collapse from their risky investments in a laxed regulated market. Failed Morgages at banks finally begin to catch up them from there risky lending. The credit market freezes up. NO more lending. People begin to panic and close their wallets. RECESSION!! Even people with decent credit can't get car finacing hurting car sales for the D3
Did I miss anything? It seems to me that the D3 were going to make it to there 2011 turnaround target with the one time payment to the UAW to cut out the legacy costs and a completly revamped product line with good quality for their future. I think the situation their in right now has ALOT to do with economic problems they have no control over. Bad government policies and unregulation in our economy seems to have taken everything down with them. So why should we let them go down the tubes and lose almost 3 millions? I know I know they have made mistakes in the past with management and bad product but I would rather see them fail because of that than fail because of an economic crises NOT caused by them.
Bottom line is this. It seems like the government would give money to banks so they can buy up other banks which eliminate overlapping jobs and distribute the profits to their share holders rather than save an industry tied to so many main street 3 million jobs.
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Aki 2:00PM (11/20/2008)
Not their fault?
How about how the fact that they couldn't even generate a profit when the market was on the upswing? Then the market crashes, and they lose even more money?
It's completely their fault. I don't see why I have to bear the brunt of their crappy decisions, or bear the brunt of Wallstreet's myopic investing, or the careless consumers who bites off more mortgage than he/she can chew.
TJ 2:02PM (11/20/2008)
You forgot that the financial wings of these corporations are eligible (and applying) for their piece of the $700 bil at the same time the manufacturing wing of the party is pleading for their own slush fund....
Double dipping into our wallets is fun, isn't it! After all, its only debt....