Day: September 30, 2008
Auto Industry Bailout Passes Congress
Who else can I bail out?
Sun Sep 28, 1:38 PM
DETROIT, Michigan (AFP) - The US Senate Saturday approved 25 billion dollars in loan guarantees for the financially strapped US auto industry, intended to spark a wave of automotive innovation.
The loan guarantees were included in a continuing resolution that included funding for the US government and the wars in Iraq and Afghanistan.
President George W. Bush has indicated that he intends to sign the bill.
"We're very pleased Congress has chosen to act at this critical time," said Greg Martin, director of communications for General Motors Corp's Washington office.
GM had been subject of much speculation that it could be forced into bankruptcy.
The bill, which was approved by the House of Representatives on Wednesday, are the first loan guarantees for US carmakers since Congress approved a similar 675 million dollar measure for Chrysler Corp. in 1980.
Chrysler Chairman Robert Nardelli, however, said this week the loan guarantees should not be considered a rescue package for struggling carmakers. "This is not a bailout," he said.
Under provisions of the new legislation, not only US carmakers are eligible for the guarantees but also suppliers and foreign automakers with plants in the United States that are more than 20 years old -- Nissan and Honda's US operations qualify.
Martin said automakers could use the money for projects such as a new engine plant GM has announced it intends to build in Flint, Michigan.
GM Chairman Rick Wagoner spoke of plans to invest 370 million dollars in a new plant, which will be the exclusive site for production of the gasoline engine or "range extender" for the electric Chevrolet Volt, due out in November 2010.
[hat tip shm]