Automakers to get $17.4 billion loan
TEXT OF STORY
Scott Jagow: No more secret Santa from the White House. This morning, it finally announced a bailout package for the automakers — $17.4 billion in loans to GM and Chrysler. They can have the money this morning, And it’s coming from the money designed for financial companies – the $700 billion.
Here’s President Bush a short time ago:
President Bush: By giving the auto companies a chance to restructure we will shield the American people from a harsh economic blow at a vulnerable time.
Jagow: We’re joined now by Marketplace’s Alisa Roth in New York. She’s been following this story all along. Alisa, what are the strings attached?
The first thing is that the carmakers are to ask for concessions from everybody. So we’re talking about debtholders, we’re talking about suppliers, we’re talking about workers. It sounds like the carmakers are going to have to reduce wages sand benefits so that they match up with the foreign carmakers — the Toytas and Hondas and so on who are working here in North America. The other thing is that the executives are going tohave to give up persk, including those infamous corporate jets that they felew ot Washington before Thanksigiving.
Jagow: And how long do the carmakers have to get their act together?
They have until the end of March, so 3 months basically to come up with viable plans to become profitable and sustainable companies. That doesn’t mean that they have to have those plans in place, they just have to have plans that make sense for them to get there. Which brings us to what happens if they can’t come up with reasonable plans… In that case they ahv eto give the money back and they’re going to have to declare bankruptcy. That’s the only other option.
Jagow: Ok, Alisa Roth in New York. Thanks.
You’re welcome.
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