An Auto Deal?
by Tom on December 10, 2008
in Market Musings
The White House and top Democrats on Capitol Hill reached agreement in principle on a sweeping rescue package for the nation’s auto makers … The bill would provide short-term funds, expected to total about $15 billion …
[A]n auto czar … would bring together labor, management, creditors and parts suppliers to negotiate a long-term restructuring plan … if a company and its stakeholders can’t agree on a plan, the czar would be required to recommend one, including the possibility of a Chapter 11 bankruptcy reorganization.
The Wall Street Journal has the story that a supposed deal has been reached. I think a couple of key words have to be noticed:
- The White House and Top Democrats – this isn’t something that has been passed by Congress yet, so it’s not a done deal.
- It’s an agreement in principle, not an agreement on the details.
- I believe that they are using $15 Billion of the $25 Billion that was originally earmarked for helping them “upgrade” to more effecient cars. It will be interesting to see what happens to the money that was originally going to come from.
- What is the government getting in return for $15 Billion?
- The real interesting part will be how the long term restructuring plan works out and what the implications that will have for the economy and the jobs picture.
Stay tuned, it’s not done yet.
