• Dec 19, 2008
President George W. Bush will doubtlessly be remembered for many things things, but his parting legacy may yet be his eleventh-hour pledge of $17.4 billion in low-interest loans to General Motors and Chrysler (Ford Motor Company has said it does not require relief at this time).

The funding will reportedly come from the Troubled Asset Relief Program (TARP), the financial industry bailout package signed off on this fall. Up front, the White House will earmark $17.4 billion in short-term financing for December and January, and in February, another $4 billion will be disbursed, provided it can draw the funds from the second half of TARP's $700 billion.

More details are doubtlessly coming, but the bridge loans appear to hinge largely on whether General Motors and Chrysler are deemed "viable" enterprises by the government. In the terms of the agreement, that means that the automakers must prove whether they have a "positive net present value, taking into account all current and future costs, and can fully repay the government loan." There's no word yet on how they will prove said viability, but we expect to learn more soon. In the meantime, expect for both General Motors and Chrysler to stick to their previous production suspension announcements.

Politico has more specifics on the bailout here.

UPDATE: Press releases from General Motors, Ford and Chrysler have been added after the jump.

[Sources: ABC NEWS, Politico, Photo by Brendan Hoffman/Getty]

PRESS RELEASES


GM Statement on Administration Providing Bridge Loan to Domestic Auto Industry


We appreciate the President extending a financial bridge at this most critical time for the U.S. auto industry and our nation's economy. This action helps to preserve many jobs, and supports the continued operation of GM and the many suppliers, dealers and small businesses across the country that depend on us.

This will allow us to accelerate the completion of our aggressive restructuring plan for long-term, sustainable success. It will lead to a leaner, stronger General Motors, a GM that is:

*dedicated to great products, exciting design, and world-class quality

*fully committed to leading in energy-saving vehicles and technologies,

*responsive to the needs of our customers, our stakeholders and the communities we live in and serve.

We know we have much work in front of us to accomplish our plan. It is our intention to continue to be transparent as we execute our plan, and we will provide regular updates on our progress. We again thank the Administration for this important support of our industry at this challenging time, and we look forward to proving what American ingenuity can achieve.

# # #


FORD MOTOR COMPANY WELCOMES ACTION TO PROVIDE EMERGENCY FUNDING TO GM AND CHRYSLER

DEARBORN, Mich., Dec. 19, 2008 – Ford Motor Company said today that it welcomes action by the Administration to provide emergency funding for General Motors Corp. and Chrysler LLC.

"As we told Congress, Ford is in a different position. We do not face a near-term liquidity issue, and we are not seeking short-term financial assistance from the government," Ford President and CEO Alan Mulally said. "But all of us at Ford appreciate the prudent step the Administration has taken to address the near-term liquidity issues of GM and Chrysler. The U.S. auto industry is highly interdependent, and a failure of one of our competitors would have a ripple effect that could jeopardize millions of jobs and further damage the already weakened U.S. economy."

Ford recently submitted to Congress its comprehensive business plan, which details the company's plan to return to pre-tax Automotive profitability by 2011. In the plan, Ford said the transformation of its North American automotive business will continue to accelerate through aggressive restructuring actions and the introduction of more high-quality, safe and fuel-efficient vehicles – including a broader range of hybrid-electric vehicles and the introduction of advanced plug-in hybrids and full electric vehicles.

"Ford has a comprehensive transformation plan that will ensure our future viability – as evidenced by our profitability in the first quarter of 2008," Mulally said. "While we clearly still have much more work to do, I am more convinced than ever that we have the right plan that will create a viable Ford going forward and position us for profitable growth."

Ford is asking for access to a line of credit of up to $9 billion in bridge financing, but reiterated that it hopes to complete its transformation without accessing a government loan.

"For Ford, a line of credit would serve only as a critical backstop or safeguard against worsening conditions, as we drive transformational change in our company," Mulally said.

Ford reiterated that it is continuing aggressive actions to reduce costs and improve Automotive gross cash to fund its product-led transformation plan, despite the continued weakness in the global automotive market and economic environment. Ford said it is more committed than ever to deliver more of the safe, affordable, high-quality, fuel-efficient vehicles that consumers want and value. The company's plans include:

* Delivering best-in-class or among the best fuel economy with every new vehicle introduced.
* Investing approximately $14 billion in the U.S. on advanced technologies and products to improve fuel efficiency during the next seven years.
* Introducing industry-leading, fuel-saving EcoBoost engines on today's vehicles for up to 20 percent better fuel economy and up to 15 percent fewer CO2 emissions versus larger-displacement engines.
* Bringing to market by 2012 a family of hybrids, plug-in hybrids and battery electric vehicles.
* Upgrading the Ford, Lincoln, Mercury lineup in North America almost completely by the end of 2010.
* Bringing six European small vehicles from global B-car and C-car platforms to be built in Ford's North America plants.
* Retooling three North American truck plants to produce small, fuel efficient vehicles.
* Building on vehicle quality that is now on par with Honda and Toyota – and that consistently is being recognized by important third-parties like J.D. Power and Associates' Initial Quality Study – driven by Ford's disciplined and standardized processes for every product.
* Building on vehicle safety leadership – with the most U.S. government 5-star safety ratings of any auto company and recently moving past Honda for the industry's most IIHS "Top Safety Picks" – plus new smart safety features, such as the industry-first MyKey technology that limits top speed and audio volume for teens and the first forward crash-avoidance system for mainstream vehicles.
* Supporting Ford's products with a lean, flexible global manufacturing system on par with leading Japanese and European facilities.

To read Ford's submission to the U.S. Congress and for more information about Ford's plan, please visit www.thefordstory.com.

# # #


Chrysler LLC Thanks the Administration and Treasury for Their Confidence

Auburn Hills, Mich., Dec 19, 2008 - Chrysler LLC Chairman and CEO Bob Nardelli said on behalf of the men and women of Chrysler and its extended enterprise, that he would like to thank the Administration and Treasury for their confidence in the Company.

"A letter of intent was signed which outlines the specific requirements that must be achieved," said Nardelli. "These requirements will require consideration from all constituents, requiring commitment first in principal, leading to implementation this coming year. Chrysler is committed to meeting these requirements."

# # #

Nardelli said the Company would remain focused on its challenge and this initial injection of working capital would help bridge the liquidity crisis the industry is facing and assist in helping return Chrysler to profitability.


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    • 1 Second Ago
  • 94 Comments
      Derek
      • 6 Years Ago
      Dear Government

      STOP GIVING AWAY ALL OF MY #$@%ING MONEY TO CORRUPT AND INEPT PEOPLE!

      Sincerely

      Sensible Law-abiding Citizens
        GiantkillerSS
        • 6 Years Ago
        @Derek
        Yeah its the non-currupt inept people that are buying stickly imports with no regard to the domestic national product that support millions of americans jobs and livelihoods.
      • 6 Years Ago
      I'm assuming that the money loaned for financing this bridge, is for the CEO's to jump off of...............................3 months extended warranty.......................
      • 6 Years Ago
      so lets do some math shall we.

      http://www.usatoday.com/money/autos/2008-11-06-GM-Ford-Pelosi_N.htm
      According to USA today
      Ford lost 7.7 Billion last quarter and
      GM lost 9.4 billion last quarter

      If the bailout goes to just those two (i cant find Chrylsers data)
      So by my calculations, 17.7 billion will be burned through by GM and Ford in 3 months and 4 days. Who wants to bail them out again in the SPRING 2009 raise your hand........
        • 6 Years Ago
        Ford is not receiving anything (yet).
        • 6 Years Ago
        The United states paid over 400 billion in interest alone this year on the money they (congress)borrowed (to help pay their salary and benefits ) and I have heard of no cuts in either of these things until viability.Strange......
      mmstowes
      • 6 Years Ago
      I meant, "since you're not likely to restructure *on your own* under Chapter 11..."
      • 6 Years Ago
      The only thing I saw in that was Ford's still doing fine but is glad to have a safety net, GM has committed to change and to build more cars that people actually want, and Chrysler is just happy not to have to go bankrupt. We'll see where this leads, what was it, "over the next seven years". I'll keep my fingers crossed.
      • 6 Years Ago
      Who thought our President would turn out to be the thoughtful and rational one in this arguement?! Thankfully, he stepped in to do the right thing even as many in his party seemed willing to sacrifice tens of thousands of middle-class jobs on the altar of union busting.

      Good job, George.
        • 6 Years Ago
        @Ka-ching...

        No, President Bush got it exactly right. A GM bankruptcy would be catastrophic for the economy right now. He also recognizes that 30 days before he leaves office he needs to take into account the policy wishes of the next administration. It will be largely the President-Elect's problem to solve. Mr. Bush didn't need to acknowledge this but he explicitly did.

        I never voted for him and I've never supported him. But this is perhaps the first statesman-like act of his presidency and I applaud him for it.
        • 6 Years Ago
        That's it! These companies need to die! What, they're going to fix 30 years of built up problems in the next 3 months.........what a bunch of bs! I own a Jeep and love it dearly, but these companies are too much. Until they die and another American company pops up to compete without the legacy baggage of the Stinky 3, I will stick to buying Japanese and German brands. Heck, their cars are often built in this country anyway! :-)

        I live in the Los Angeles area, the car capital of the country, if not the planet. At this time, VERY few people in Los Angeles are buying new American cars, that tells me they are doomed. Why is congress proglonging their death? I dunno, maybe Bush wants to have that death on Obama's hands....lol. Nuff said.
        • 6 Years Ago
        Thank you Bob. As a conservative, I promise to publicly thank Obama if he does something I am in support of.

        The Other Bob has "manned up". Are there any others?
        • 6 Years Ago
        "All of you who railed against the Republican Senators who blocked the original bill and have taken shots at Bush - I want to hear you say thank you. Be a man (or a woman) and do the right thing. "

        I am a pretty liberal guy and no Bush fan.

        Thank you George W. Bush.
      • 6 Years Ago
      It's 13.4 now and MAYBE 4 billion in February. So it's not definitely 17.4 billion, and it's not all of it right now.
      • 6 Years Ago
      Todd
      "...Let's go out and support, (by purchasing) some domestic goodness"

      I was just forced to give them $1,100 cash ( each of us were ) thanks to Bush - Isn't that enough?

      Funny to see people here say "Buy American" even though what were are doing is the same thing they do in Socialist France ( underwrite failed car makers ).

      --------------

      Hey riceball, your math using the yen ?

      If Americans were really paying out $1100 each for 14 billion then how much are we also paying for the $680 billion to the banks ( many non American) ! ?

      Interesting WE should shell out to repay your screwed up loans that put the banks into the position they are in and you have the balls to give us your example of math ?

      YES, its a war, buy American, anything else, let it rot like the thousands of cars toy ota is hiding on public lands in Ca that they cannot sell.
      • 6 Years Ago
      The money was going to come from TARP all along. Detroit was never going to get any "new" money now. It will be a different story once Obama is in office. The Big 3 will then be given untold amounts of money with lots of strings attached dictating what kinds of cars they can build. Wait and see.
        • 6 Years Ago
        That was my fear all along. I'd rather see a no-strings attached restructuring than a gov't-owned car-czar managed producer of health-and-safety approved cars.
      • 6 Years Ago
      Ok.

      No American Car Company will get my future consideration until something changes for the better. A LOT better.

      They have pushed their incompetence and ineptitude off onto the government. The only things about that are, that the government is more inept and incompetent than they are, and the only money the Government has, it takes from the people in taxes, debt+interest (future, higher taxes), or deflating the currency (diluting everyone's purchasing power).

      If the Big 3 are getting tax money, they aren't going to get my discretionary money. They don't get to bleed me dry by force of law by tyrants, and then get my honest business, too.

      Bad move. It always has been a bad move, and TARP was, too.
        • 6 Years Ago
        I know. And I used to own Fords. I don't anymore.

        But they were there, at the table, still asking for the opportunity. Ford did not step up and say...

        "No, we don't need it, so we aren't going to participate in this, we are not going to condone the additional confiscation of tax money from both our employees, and our customers, for corporate operations."

        If they had stood apart, said that, and stayed the hell off of capitol hill, I would be CHEERING them right now.

        They may not be completely covered in this 'stuff', but they are standing in it.
        • 6 Years Ago
        The "Big Three" are not taking tax money, only the "Big 2" which consist of GM and Chrysler. Ford isn't getting a penny of this money. As stated in their press release, they welcome the money going to the other two companies, but Ford does not need it. Yet. (probably won't)
      mmstowes
      • 6 Years Ago
      The one thing I was unclear on from Bush's speech is whether he actually wants the Detroit 3 to file Chapter 11. There was a lot of talk leading up to it that this was going to be one of the requirements for the loan. I think I missed the part where Bush actually said it or maybe he didn't, but it seems to me, the 3-31 is essentially to force GM to file Chapter 11, since GM is highly unlikely to do it themselves. GM is aware of its finances and whether or not they are able to pay that loan back by 3-31 (based on how much cash they're burning through, it seems highly unprobable).

      Someone please correct me if I'm wrong, but I think Bush was saying "here, we'll give you the loan, but you need to have a restructuring plan to show us by 3-31. We already know you're not going to be able to pay this loan back and since you're not likely to restructure under Chapter 11, which we all feel is your best course of action for restructuring and getting certain monkeys off your backs, we're essentially going to have to force you to do it. In the meantime, you're not just going to sit on your hands; you've already hired bankruptcy firms so you need to show us you're serious with a viable plan by 3-31 so when you do actually file for Chapter 11, we can all get you back on your feet as quickly and as painlessly as possible. If you can present such a plan to us, we can proceed and provide another loan to you then, but we're not just gonna hand you a lump sum of cash with no hand-holding here."

      It's not often that I agree with him, but if this is what Bush was intending to do, I feel this was the right way to go about it, for the long term.
      • 6 Years Ago
      There are too many closed minded, ignorant, lack of understanding individuals in this country that don't see the big picture that It's not worth debating with them.
        • 6 Years Ago
        And what do you mean by that?

        Ignorant people who want to bail out private business, and end actual private-ownership accountability enforcement, and tear the US Constitution to pieces in the process?

        OR

        Ignorant people who don't want to do those things?

        What most people don't seem to realize, that G.W. Bush has just circumvented the legislative body, which the executive branch should never have been able to do, which is a distinct problem from whether the federal government should have the power to use the taxpayer to bail out private businesses, and absolve risk arbitrarily.

        The executive branch has just flouted the will of the representatives of the people. The US Constitution is for all intents and purposes, no longer being applied as the law of the land, and the government is operating outside of it's own rules.
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