George Bush bails out America's carmakers temporarily—now they are Barack Obama's problem
IN THE run up to George Bush’s announcement on Friday December 19th that he would bail out Detroit’s beleaguered carmakers rumours abounded that perhaps something more drastic was in the offing. Maybe the president would insist on an orderly transition into chapter-11 bankruptcy protection for Chrysler and General Motors—Ford, though also in dire trouble, is in slightly better shape. In the event he elected to do the minimum required to keep the cash-guzzlers on the road. Allowing the American car industry to collapse at the end of his presidency would have amounted to a bail-out for Barack Obama, the president-elect.
A bail-out bill that had swept through the House of Representatives failed to pass in the Senate on December 11th. So Mr Bush instead has had to raid the $700 billion Troubled Asset Relief Programme (TARP), set up to bail-out Wall Street's banks and other financial institutions. GM and Chrysler will get $13.4 billion in emergency loans with another $4 billion to come in February. Without the cash the pair might have collapsed by the end of the year. The terms of the loan could allow the government to become big shareholders. ...
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[Source: The Economist: News analysis - Posted by FreeAutoBlogger]
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