It's taken two rounds of Congressional hearings, some major pride swallowing and three detailed business plans, but it looks as if the Detroit 3 will be getting the federal loans they need, though not as much they asked for. A deal was reportedly reached between Democratic leaders and the White House that will supply around $15 billion in federal loans to the struggling U.S. auto industry. While General Motors, Ford and Chrysler asked for a combined maximum of $34 billion, the $15 billion is designed to ensure they stay alive until March when the issue will be readdressed with the input of a fresh Obama administration. GM and Chrysler reportedly need around $11 billion to survive the new year, while Ford has said it would only need government aid if one of the other two went under.
We're hearing that a deal was reached between Democrats and the Bush administration late Friday after top Dem. Nancy Pelosi gave in to the White House and its position that the money should come from $25 billion in loans previously approved to help the automakers retool for energy fuel efficient vehicles, rather than drawing the aid from the $700 billion Troubled Asset Relief Fund for struggling financial institutions. In return, Pelosi is seeking a guarantee that the money would be replenished in "a matter of weeks."
Both the Senate and House of Representatives have confirmed they will be meeting on Tuesday to vote on the deal, and it's expected that strong oversight of how the loans are used, whether in the form of an individual car czar or committee, will be part of the final package.
Party on, Detroit.
[Source: Reuters, Photo by Brendan Hoffman/Getty]