December 12th, 2008
Detroit reaches dead end unless White House intervenes
It’s all over but the recriminations and finger-pointing. This calendar year there’ll be ZERO loans approved in Congress for the Detroit Shrinking Three automakers. Any federal action to prevent the threatened implosion of General Motors, still the number one selling auto maker in the U.S., will have to come from executive action. This is likely to happen. Of course, the current administraton has less than forty days left in power, then it’s the next guy’s problem. But again it looks unlikely any loan package would get approved by the U.S Senate even after it reappears in its new composition in January.
White House. Courtesy U.S. government.
One administration spokesman said, “Because Congress failed to act, we will stand ready to prevent an imminent failure until Congress reconvenes and acts to address the long-term viability of the industry.” Expect these loans to have few requirements for the automakers. It’s likely to be much like the money doled out to financial corporations by the Treasury Department and Federal Reserve. “Here. Enjoy. Happy Holidays.”
Loading ...Any money from the Treasury Department would apparently have to come from TARP, those hundreds of billions first earmarked for the financial industry only.
So many things are at stake in this drama. For our purposes the future of the Chevy Volt, a promised plug-in electric car is of interest. Will there be any loan provisions that require or ignore alternative energy sources for cars. It’s already clear the domestic ethanol industry is having some trouble.
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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