[Peace-discuss] auto bailout on IMF terms

[Ricky Baldwin]

Note the "President Bush saves Christmas"* tone of this.  But more importantly ...

Having lost the opportunity to structure this rescue on even vaguely social terms - not assuming *they* wanted to, but that *we* wanted them to do so - Congress had passed the buck to, not the worst president in US history, but certainly one of the worst in recent memory.  His administration has done it on predictable terms: lowering wages, doubtless expectations to "streamline" the workforce ("viability" here), no accounting for economic "externalities" (such as the wider social impact of lower these wages, etc, in the current economic "crisis"), etc.

This is the opposite of that "Social Monetary Fund" I suggested earlier (The fools! Imagine, not listening to me!) - it's IMF right here at home.  More where that came from, I reckon. 

 Ricky 


* "President Bush saves Christmas" was the teaser when WCIA-3 reported Bush's military intervention on the side of the bosses in the dockworker dispute (falsely reported as a strike, it was actually a lockout) a few years ago.




President Bush: Automakers to get $17.4B
By DEB RIECHMANN, Associated Press Writer Deb Riechmann, Associated Press Writer  9 mins ago 
WASHINGTON – Citing danger to the national economy, the Bush administration came to the rescue of the U.S. auto industry Friday, offering $17.4
billion in emergency loans in exchange for concessions from the deeply
troubled carmakers and their workers.
At the same time, Treasury Secretary Henry Paulson said Congress should authorize the use of the second $350 billion from
the financial rescue fund that it approved in October to rescue huge financial institutions.
President Bush said, "Allowing the auto companies to collapse is not a responsible
course of action." Bankruptcy, he said, would deal "an unacceptably
painful blow to hardworking Americans" across the economy.
One official said $13.4 billion of the money would be available this month and next, $9.4 billion for General Motors Corp. and $4 billion for Chrysler LLC. Both companies have said they soon might be unable to pay their bills without federal help. Ford Motor Co. has said it does not need immediate help.
Bush
said the rescue package demanded concessions similar to those outlined
in a bailout plan that was approved by the House but rejected by the
Senate a week ago. It would give the automakers three months to come up
with restructuring plans to become viable companies.
If
they fail to produce a plan by March 31, the automakers will be
required to repay the loans, which they would find very difficult.
"The
time to make hard decisions to become viable is now, or the only option
will be bankruptcy," Bush said. "The automakers and unions must
understand what is at stake and make hard decisions necessary to
reform."
Bush's plan is designed to
keep the auto industry running in the short term, passing the
longer-range problem on to the incoming administration of President-elect Barack Obama.
The
White House package is the lifeline desperately sought by U.S.
automakers, who warned they were running out of money as the economy
fell deeper into recession, car loans became scarce and consumers
stopped shopping for cars.
The carmakers have announced extended holiday shutdowns. Chrysler is closing all 30 of its North American manufacturing plants for four weeks because of slumping sales; Ford will shut 10 North American assembly plants for an extra week in January, and General Motors will temporarily close 20 factories — many for the entire month of January — to cut vehicle production.
Bush
said the auto manufactures have faced serious challenges for many
years: burdensome costs, a shrinking share of the market and plunging
profits. "In recent months, the global financial crisis has made these challenges even more severe," he said.
The
president said that on the one hand, the government has a
responsibility not to undermine the private enterprise system, yet on
the other hand, it must safeguard the broader health and stability of
the U.S. economy.
"If we were to allow
the free market to take its course now, it would almost certainly lead
to disorderly bankruptcy and liquidation for the automakers," he said.
"Under
ordinary economic circumstances, I would say this is the price that
failed companies must pay," the president said. "And I would not favor
intervening to prevent the automakers from going out of business. But these are not ordinary circumstances.
"In
the midst of a financial crisis and a recession, allowing the U.S. auto
industry to collapse is not a responsible course of action."
Chrysler CEO Bob Nardelli thanked the administration for its help.
In
a statement Friday morning, Nardelli said the initial injection of
capital will help the company get through its cash crisis and help
eventually return to profitability. He said Chrysler was committed to
meeting the conditions set by Bush in exchange for the money.



      
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