GM and Chrysler have made it clear that they need $21.6 billion in federal loans to stay afloat, in addition to the bailout money they have already received. They have also released detailed plans in which they cut 50,000 jobs, close several plants, and drop some of their weaker brands. Experts say this request for more money is no surprise.
The issue is not as much what the car companies are doing to cut costs, but what the government will do to stimulate car sales. Read more…
The big carmakers will be begging Congress for a $50B loan, this immediately after the Government takes over control of Fannie Mae and Freddie Mac, the two mortgage giants who account for about 9 mortgages out of 10 in the USA.
Read more about the carmakers plea:
Auto industry allies hope to secure up to $50 billion in government loans this month that would pay to modernize plants and help struggling car makers build more fuel-efficient vehicles.
With Congress returning this coming week from its summer break, the industry plans an aggressive lobbying campaign for the low-interest loans. The situation is growing dire after months of tumbling sales, high gasoline prices and consumers’ abandoning profitable trucks and sport utility vehicles.
Lawmakers authorized $25 billion in loans in last year’s energy bill to help the companies build fuel-efficient vehicles such as hybrids and electric vehicles. With credit tight, automakers and suppliers now want lawmakers to come up with the money for the program — and expand the pool of money available to $50 billion over three years.
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