Buddy Can you Spare a $Billion? How about $18b? Automakers Ask Congress for Loans

December 03 2008 / by joelg
Category: Energy   Year: 2008   Rating: 3

225_fiftybilliondollars.jpgBy Joel Greenberg

What Happened?
Responding to the US government's request that they provide plans for what they would do with government loans, the Big Three automanufacturers presented their plans.  Here's an overview of what they're asking.

The Big Three automakers all describe a 'perfect storm':

- sales down 30% or so from last year due to downturn in economy
- credit markets frozen so they can't offer credit to car buyers, accelerating the decrease in sales.
- All in various stages of transition to new technology (smaller vehicles, electric vehicles, more fuel efficient gas engines & drive trains, etc.)

'Help us through this rough patch,' they all seem to be saying, 'and we'll help you by not tanking the economy even further.'  GM is the most direct in articulating the threat.  "A failure by GM will likely trigger catastrophic damage to the U.S. economy..." while Chrysler goes into detail why a bailout is preferable to bankruptcy.  Ford's the most upbeat. "We note that Ford is in a different situation from our competitors, in that we believe our Company has the necessary liquidity to weather this current economic downturn – assuming that it is of limited duration." 

Here's what they're asking for:

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