December 10th, 2008
Dashboard warning lights aglow: Detroit low on fuel and oil pressure
The odds of the Detroit Shrinking Three automakers getting any kind of federal loan help this year are getting slimmer. Now comes word that even the robust popularity of a sitting President (I jest) can sway members of his own party to get the proposed auto loans through the Senate.
Apparently the President himself will lobby his own party members to support the $14 billion compromise loan plan the White House has worked out with Democratic Congressional leaders. The provision forcing Detroit to stop fighting tougher emission standards in court has fallen to the wayside. While the bill will likely get through the House where only a simple majoirty is needed, the bill seems doomed in the Senate where 60 votes out of a possible 99 (remember Illinois is down to one Senator) are needed to stop an opposition filibuster.
It is crucial to note that this auto bill also includes a pay raise for federal judges. We’ve all been pulling for that one. What kind of smybol is it for America 2008 when federal judges and the United Auto Workers find their livelihoods tied together in a bill that seems doomed to failure?
GM’s Financing Arm Getting Gangrene?
When you’re hot, you’re hot. When you’re rot, you’re rot. The latter seems to be GM’s current fate. GMAC was trying to become a bank holding company so it could access some of those easy dollars under TARP. But bond-holders are balking. GM and a private equity firm share ownership of GMAC.
Whether the Shrinking Three get their loans eventually, or not, downsizing will happen, ripples of job losses will spread out from Detroit. Here is just one example, an aluminum plant that had 400 workers in 2005, now down below 100 after another round of Alcoa layoffs. With ethanol hurting and auto industry going south, it is not a happy holiday season for many sections of the Midwest.
A newsman since 1969, Harry Fuller has worked for CBS, ABC, CNBC Europe, CNET and was founding news director at TechTV. See his full profile and disclosure of his industry affiliations.
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