Saturday, November 08, 2008

GM Comes Begging Bail Out Capital

GM ate up its $7 billion "cash hoard," so it now wants a piece of the bail out capital pie beyond the low-interest fuel-efficient production loans Bush gave it.

UPDATE: For some historical perspective on auto manufacturer bail outs, consider the case of Chrysler in 1979 (according to Wikipedia):
The United States Congress reluctantly passed the "Chrysler Corporation Loan Guarantee Act of 1979" (Public Law 96-185) on December 20, 1979 (signed into law by President Jimmy Carter on January 7, 1980), prodded by Chrysler workers and dealers in every congressional district who feared the loss of their livelihoods. The military then bought thousands of Dodge pickup trucks which entered military service as the Commercial Utility Cargo Vehicle M-880 Series. With such help and a few innovative cars (such as the K-car platform), especially the invention of the minivan concept, Chrysler avoided bankruptcy and slowly recovered.

In February 1982 Chrysler announced the sale of Chrysler Defense, its profitable defense subsidiary to General Dynamics for US$348.5 million. The sale was completed in March 1982 for the revised figure of US$336.1 million.

By the early 1980s, the loans were being repaid at a brisk pace and new models based on the K-car platform were selling well.

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