US May Tap TARP To Save Car Firms

SKY NEWS
Friday, December 12, 2008

The White House will consider tapping a $700bn financial rescue fund to bail out the US car industry after the Senate rejected a bill aimed specifically at saving the sector.

A spokeswoman said the administration would look at using the Troubled Asset Relief Program to tackle the problem because of the threat it posed to the economy as a whole.

Dana Perino said: “Given the current weakened state of the US economy, we will consider other options if necessary – including use of the TARP program – to prevent a collapse of troubled automakers.”

(ARTICLE CONTINUES BELOW)

Her comments came after the US Senate voted against a $14bn package to rescue the industry following Republican demands that the car workers’ union agree to wage cuts.

Ms Perino declined to say when a decision on using the fund would be made, but said the White House understood “the urgency of the situation”.

“While the federal government may need to step in to prevent an immediate failure, the auto companies, their labour unions and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable,” Ms Perino warned.

Reports in the US say General Motors has appointed bankruptcy lawyers and restructuring specialists as concerns grow over its survival.

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5 Responses to “US May Tap TARP To Save Car Firms”

1. Alex (not Jones) Says:
   December 12th, 2008 at 1:33 pm

   Is it time to riot yet?

2. King Hercules Says:
   December 12th, 2008 at 2:28 pm

   Of course its time to use TARP, even though GM has known for years if they keep making crappy cars EVERYONE they know will be out of a job…
   Bankster Bail-outs for CEOs making 100Million in just a few years time give or take…
   Millions employed cant even get 15 Billion… See the IRONY?
   http://www.youtube.com/watch?v=eKjucvkZkeQ
   Your TAX DOLLARS spent keeping the BANKS flush with cash while the real economy implodes even faster…

3. Thebes Says:
   December 13th, 2008 at 12:32 am

   Its really ironic that the Rethuglicans are griping over 2% of the amount of the bailout that Paulson demanded under threat of martial law.

   I don’t really support any bailouts, but if we are going to rob from the people of this nation to save some corporation from its idiot handlers, the auto industry makes a lot more sense than throwing it all to the bankers. In WWII is was largely the manufacturing capacity of our nation’s large factories that built our war apparatus… it makes some sense to insure that we don’t lose all ability to manufacture. Its quite possible that if the government does not intervene (and the Bush regime DID intervene to insure these gas guzzling crapmobiles were produced in the first place)… it is quite possible that there will be no domestic automotive manufacturing… the Chinese might very well buy it up and export the tooling, patents, etc.

4. Atilla Says:
   December 13th, 2008 at 2:05 am

   Gm cars are as good as anyone elses today. If Bush does one good thing in his life, it will be to help our manufacturing in the US.

5. Alex (not Jones) Says:
   December 13th, 2008 at 9:55 am

   I agree that GM cars are as good or better as anyone’s. I run a fleet and know what these things cost long term. The GM’s mainly Chevy’s run easily 100k+ miles with no problems or repair. My own Tahoe has 210k miles and I have never had to do anything but maintenance tires and brakes and one battery. It’s still as solid as the day I bought it and the 5.3l engine gets 20 mpg on the highway, my brothers Toyota gets 16 and it’s new.

   The Nissan’s and Toyota’s see a lot of repairs but they are hidden in the maintenance services. When you take the cars in they fix the valve train or fuel injection system but since it was done on a routine service stop no body counts that as a major repair.

   Also people are basically stupid, my son-in-law had his Toyota Tacoma worked on countless times for brakes, fuel injection and transmission problems but when you ask him he will claim it’s trouble-free because it’s a Toyota.

   However. GM built junk for years and laughed at it. I can tell you stories from my days at GM, hoo biy I can tell you stories, but GM shit in their own mess kit. Once you lose a customer you have work 10 times harder to get them back. That’s where they are now, they are victims of their own short term (MBA trained) thinking, where you onlyt look 2 quarters ahead.

   I am against the bailout because oddly, I believe in their ability to make great cars. Once they start taking government money and have to dance to the tune of the “car czar” then the industry is dead. Think the old Soviet Union and the cars they made. That’s will be the future of Detroit. Politically correct pedal powered Trabant clones made from recycled cardboard.

   Do you want the US to make cars designed by a government committee? The industry will be the laughing stock of the world like the Soviet cars were. The whole idea is insane.