Wednesday, November 26, 2008
The tens of billions of U. S. taxpayer dollars being asked for by Detroit could be the tip of the iceberg, analysts at JPMorgan said yesterday.
With Congress preparing to hand struggling automakers General Motors Corp., Ford Motor Co. and Chrysler LLC US$25-billion in loans, JPMorgan analysts said any emergency cash would just be a lifeline until Barack Obama’s administration takes over in January.
Mr. Obama’s economic team would be put to work quickly, tasked with crafting a second, more comprehensive bailout package involving concessions from creditors and labour in what would amount to a sweeping restructuring of the Big Three.
(ARTICLE CONTINUES BELOW)
Structural costs would be a primary target under any Washington-brokered overhaul, JPMorgan said, with concession from creditors and the United Auto Workers “inevitable.”
The so-called “shared sacrifice scenario” would take months to negotiate, analysts said, likely equating to further injections of operating capital for Detroit. What all of this means for Canada, which has already shed more than 10,700 auto-manufacturing jobs this year, is uncertain.
This article was posted: Wednesday, November 26, 2008 at 9:57 am