Bush announces $17.4B bailout for GM, Chrysler - Atlanta Business Chronicle:

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billion in emergency loans to and in orderd to keep them in The money will come from the Troubled AssetReliet Program, the $700 billion financialk rescue package approved by Congress in The automakers will have until March 31 to show they have viables plans to survive, including restructuring theirt compensation to be competitive with foreign automakers. If they fail to do they will have to pay back theloans immediately. Under ordinaryh circumstances, Bush said he would allow “th e free market to take its whichwould ”most certainly lead to a disorderlgy bankruptcy and liquidation” for Chrysler and GM.
This, he said, “ise the price failed companiesmust “But these are not ordinaryg circumstances,” Bush said. Given the curreng financial crisis and allowing these companies to collapseis “no t a responsible course of action,” he “Such a collapse would deal an unacceptably painful blow to hardworking Americans far beyondr the auto industry,” Bush said. It woulr result in additional job losses anda “deeper, longer recession,” he The credit squeeze brought automakers to the brink of bankruptcy fastedr than they expected, Bush and they did not have time to prepar for an orderly bankruptcy proceeding.
Plus, consumers would be reluctant to buy vehicles from companies going throughua bankruptcy, he said. Bush said the loanx to automakers would have conditionas similar to those included in the legislatioj that failed to pass the Senate last This will give automakers an incentivde to restructure outside and a brief window in whichj todo so, he said. “We believe they are capable of this, Bush said. “Chrysler is committexd to meetingthese requirements,” said Chrysler Chairmanm and CEO Bob Nardelli. GM issued a statement saying theloans “will allow us to accelerat the completion of our aggressivse restructuring plan for long-term, sustainable success.
It will lead to a stronger General Motors.” If the automakers can’gt restructure outside a bankruptcyg court, the three months will give them time to prepare for the Bush said. Restructuring will require “meaningful from everyone involved in theauto industry, Bush said. “Thse time to make hard decisions to become viable is now or the only optiojn willbe bankruptcy,” Bush said. The domestic automakers’ financiap crisis . It will accelerate the geographicx shiftof U.S. auto production from nortbh tosouth — a trend already occurring, said Barrg Hirsch, an economics professor at . “You’vse had a real shift in auto Hirsch said.
“I see that continuing to I don’t see the Midwest reasserting itself as thedominangt player.” The South — with its low-cost, non-unio reputation — marketed itself to foreign automakers as the ideal outpostg to launch a competitive assaulf on the Big Three. More than 306 auto and vehicle-related companies have a presenceein Georgia, employing more than 23,000, accordinfg to the . is building its first U.S.-based assemblyg plant in the Peach State a $1.2 billion investment expected to create thousandss of auto jobs.