From Wall Street Journal:
Auto Executives to Seek Government Help
By JOHN D. STOLL, STEPHEN POWER, and COREY BOLES
September 8, 2008
Top auto executives, including General Motors Corp. Chief Executive Rick Wagoner, will launch a lobbying push this week for billions in government loans to help beleaguered auto makers and their suppliers.
They aim to get as much as $50 billion in low-cost loans, and will try to play down the idea they are seeking a bailout, arguing that Washington has offered similar help to a range of other troubled industries, people familiar with the auto makers' lobbying plans said.
The auto makers and their Congressional supporters also will argue that they need funding to meet new fuel-economy standards imposed by Congress, and that the debt markets have broken down in the credit crisis, leaving them few other options, these people said.
Most analysts agree the new fuel-economy rules that take effect in the next decade will require billions of dollars in investment by the auto industry -- money the Detroit three don't have right now.
The industry's chance of getting help may have dimmed, however the government announced it will provide a plan to provide as much as $200 billion in new capital as part of a takeover of the country's main providers of funds for home loans, Fannie Mae and Freddie Mac.
While many legislators in Midwestern states support aid for the industry, it's unclear if the loans being sought will win enough support from representatives of other states. Last week, Sen. Orrin Hatch (R., Utah) said he was concerned about the amount of money.
"We don't want our automobile industry to go down, but on the other hand, they've made a lot of bad choices," Sen. Hatch said.
Backers say Detroit has only a few weeks to move. Lawmakers, due in Washington this week, are expected to sit for only another 15 days before hitting the campaign trail and not return until 2009. "We don't have much time, we have to move pretty fast," Rep. Joe Knollenberg, a Republican from Michigan, said Friday. An aide to Rep. Sandy Levin, a Michigan Democrat, said pushing the loans is his top priority. Several other Michigan lawmakers have voiced strong support for the loans.
On Friday, Mr. Wagoner is scheduled to participate in an energy summit in Washington, and is expected to address the issue of loans in prepared remarks and during a question-and-answer session.
People familiar with the situation have said executives from GM, Ford Motor Co. and Chrysler LLC plan to make a joint appearance in Washington later this month. That trip could include a meeting with the Federal Reserve, these people say.
Auto makers are prepared to point out that the federal government has recently offered billions in loan guarantees for nuclear power plants, airlines and steel makers."
Someone tell me why this "loan" is a good idea?
Auto Executives to Seek Government Help
By JOHN D. STOLL, STEPHEN POWER, and COREY BOLES
September 8, 2008
Top auto executives, including General Motors Corp. Chief Executive Rick Wagoner, will launch a lobbying push this week for billions in government loans to help beleaguered auto makers and their suppliers.
They aim to get as much as $50 billion in low-cost loans, and will try to play down the idea they are seeking a bailout, arguing that Washington has offered similar help to a range of other troubled industries, people familiar with the auto makers' lobbying plans said.
The auto makers and their Congressional supporters also will argue that they need funding to meet new fuel-economy standards imposed by Congress, and that the debt markets have broken down in the credit crisis, leaving them few other options, these people said.
Most analysts agree the new fuel-economy rules that take effect in the next decade will require billions of dollars in investment by the auto industry -- money the Detroit three don't have right now.
The industry's chance of getting help may have dimmed, however the government announced it will provide a plan to provide as much as $200 billion in new capital as part of a takeover of the country's main providers of funds for home loans, Fannie Mae and Freddie Mac.
While many legislators in Midwestern states support aid for the industry, it's unclear if the loans being sought will win enough support from representatives of other states. Last week, Sen. Orrin Hatch (R., Utah) said he was concerned about the amount of money.
"We don't want our automobile industry to go down, but on the other hand, they've made a lot of bad choices," Sen. Hatch said.
Backers say Detroit has only a few weeks to move. Lawmakers, due in Washington this week, are expected to sit for only another 15 days before hitting the campaign trail and not return until 2009. "We don't have much time, we have to move pretty fast," Rep. Joe Knollenberg, a Republican from Michigan, said Friday. An aide to Rep. Sandy Levin, a Michigan Democrat, said pushing the loans is his top priority. Several other Michigan lawmakers have voiced strong support for the loans.
On Friday, Mr. Wagoner is scheduled to participate in an energy summit in Washington, and is expected to address the issue of loans in prepared remarks and during a question-and-answer session.
People familiar with the situation have said executives from GM, Ford Motor Co. and Chrysler LLC plan to make a joint appearance in Washington later this month. That trip could include a meeting with the Federal Reserve, these people say.
Auto makers are prepared to point out that the federal government has recently offered billions in loan guarantees for nuclear power plants, airlines and steel makers."
Someone tell me why this "loan" is a good idea?
