Archive for the ‘auto industry’ Category

Obama adviser: Auto industry must restructure

February 15, 2009

President Barack Obama‘s senior adviser said Sunday that any plan to shore up the auto industry will need to require sacrifice by all involved, from auto workers and industry executives to shareholders and creditors.

By DOUGLASS K. DANIEL, Associated Press Writer

General Motors Corp. and Chrysler LLC are expected to submit plans to the government by a Tuesday deadline to show how they can repay billions in loans and become viable in spite of a drop in auto sales not seen for a generation.

“We need an auto industry in this country. There are millions of lives, livelihoods that depend on it,” White House adviser David Axelrod said on “Meet the Press” on NBC. “We have a real interest in seeing the auto industry survive, but it’s going to require a major restructuring of the auto industry.”

Asked if the U.S. economy could withstand a bankruptcy at GM, Axelrod didn’t respond directly. Executives at the two automakers have said bankruptcy would not benefit their companies because consumers would be reluctant to buy cars from an automaker that might go out of business.

“How that restructuring comes is something that has to be determined,” he said. “But it’s going to be something that’s going to require sacrifice not just from the auto workers but also from creditors, from shareholders and the executives who run the company. And everyone’s going to have to get together here to build companies that can compete in the future.”

Axelrod wouldn’t say whether the administration would offer the auto industry more bailout money. GM already has borrowed $9.4 billion to stay in business, and it would receive an addition $4 billion if the Treasury Department approves its viability plan. Chrysler wants $3 billion more on top of the $4 billion it has already borrowed.

“We need to see what it is that they come up with this week,” he said.

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http://news.yahoo.com/s/ap/20090215/ap_o
n_go_pr_wh/obama_autos

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Fed’s Bernanke: Auto Makers Have Insufficient Collateral To Assure Repayment

December 9, 2008

Federal Reserve Chairman Ben Bernanke suggested Tuesday that he would be reluctant to use the central bank’s emergency lending program to help struggling U.S. auto companies.

In a letter to Senate Banking Committee Chairman Christopher Dodd, D-Conn., Bernanke wrote that any decision about whether to provide financial aid to Detroit is best left to Congress.

US Federal Reserve Bank Chairman Ben Bernanke pauses during ... 
Federal Reserve Chairman Ben Bernanke

Congress and the White House are pushing to clear the final obstacles to a $15 billion bailout of the auto industry, seeking agreement by the end of the day followed by swift passage.

The chief executives of Chrysler LLC, General Motors Corp. and Ford Motor Co. last week returned to Capitol Hill to again ask lawmakers for billions in emergency aid.

By JEANNINE AVERSA, AP Economics Writer

“The Federal Reserve would be extremely reluctant to extend credit where Congress has actively considered providing assistance, but after due consideration, has decided not to act,” Bernanke wrote Dodd. The letter was dated Dec. 5 and released Tuesday.

A key consideration in letting an auto company draw emergency cash loans from the Fed is whether the company has sufficient collateral or other security to ensure repayment of the loan. “It is unclear whether the auto manufacturers have unencumbered assets of sufficient amount and quality to meet this requirement,” Bernanke wrote.

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http://news.yahoo.com/s/ap/20081209/ap_on_bi_ge/bernanke_autos