White House exploring auto industry options

WASHINGTON — The White House said Sunday it does not expect to make an announcement by today on a possible plan to prevent the collapse of the troubled auto industry.

The Bush administration is considering ways to provide emergency aid to General Motors Corp. and Chrysler LLC, which have said they could run out of cash within weeks without government help.

The aid probably would benefit General Motors and Chrysler. Ford Motor Co. has said it has enough cash to survive 2009 but asked Congress for a line of credit in case financial conditions deteriorate.

GOP Sen. Bob Corker of Tennessee, after speaking with the White House early Sunday, said, "I don't think they yet know what they are going to do." Ron Gettelfinger, the president of the United Auto Workers union, said the union had not held discussions with the White House.

Last week, Congress failed to approve $14-billion in loans to help the automakers. The plan would have provided short-term financing to the industry and create a "car czar" who would ensure that the money would transform the Big Three into competitive companies.

In the aftermath of the legislative defeat, administration officials have said they are considering several options, including using money from the $700-billion financial bailout fund to provide loans to the carmakers.

Corker said Treasury officials were reviewing the companies' balance sheets, but "both Chrysler and GM are on the verge of bankruptcy, just a few days away."

Corker and other Republicans sought a compromise that would have insisted the carmakers to restructure their debt and bring wages and benefits in line with those paid by Toyota, Honda and Nissan in the United States. The legislation died when Republicans demanded up-front pay and benefit concessions from the United Auto Workers that union leaders rejected.

Corker urged the administration to seek similar concessions from the auto companies and their unions in return for the money.

The options

The Bush administration is weighing its choices, among them:

•Tap the $700-billion financial rescue bailout fund to provide loans to carmakers;

•Use part of the bailout fund as a kind of collateral for emergency loans to automakers from the Federal Reserve.

• Do nothing, leaving open the possibility that one or more of the automakers could go bankrupt.

fast facts

The options

The Bush administration is weighing its choices, among them:

•Tap the $700-billion financial rescue bailout fund to provide loans to carmakers.

•Use part of the bailout fund as a kind of collateral for emergency loans to automakers from the Federal Reserve.

• Do nothing, leaving open the possibility that one or more of the automakers could go bankrupt.

.fast facts

The options

The Bush administration is weighing its choices, among them:

•Tap the $700-billion financial rescue bailout fund to provide loans to carmakers;

•Use part of the bailout fund as a kind of collateral for emergency loans to automakers from the Federal Reserve.

• Do nothing, leaving open the possibility that one or more of the automakers could go bankrupt.

White House exploring auto industry options 12/14/08 [Last modified: Thursday, November 4, 2010 12:54pm]

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