Fallout: The Financial Crisis

A future without Chevy or Dodge?

Janet Babin Feb 18, 2009
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Fallout: The Financial Crisis

A future without Chevy or Dodge?

Janet Babin Feb 18, 2009
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TEXT OF STORY

Steve Chiotakis: The Federal Reserve says industrial production fell 1.8 percent last month. Some of that is attributable to auto plant closings and a stymied auto industry. The Obama administration continues to look at what it can do. GM and Chrysler, meantime, are asking for more money — about $22 billion in additional help from the government. To get it, they’ll going to have to convince the administration’s auto team it’s the best course of action. From North Carolina Public Radio, here’s Marketplace’s Janet Babin.


Janet Babin: President Obama’s car task force includes Treasury Secretary Timothy Geithner, and Ron Bloom, a former consultant to the United Steelworkers of America. They’ll have to decide whether to honor GM and Chrysler’s request for more government bailout money. Or, to drive the companies into bankruptcy or liquidation.

Professor Jack Donahue at Harvard’s Kennedy School of Government says the team’s first question should be:

Jack Donahue: What’s the public benefit versus the public cost of trying to save these companies? The tough thing is that Americans are used to being sentimental about their cars and about their car companies. We can’t imagine a future without Chevvy, without Dodge.

But he says now is no time to get sentimental. The White House has said that more will be required of creditors, suppliers, labor and auto executives.

And GM and Chrysler have promised more pain: 50,000 more job cuts, more reductions in U.S. plants, and car brands.

I’m Janet Babin for Marketplace.

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