Bush's auto bailout requires worker wage concessions

[babylonsister]

Bush's auto bailout requires worker wage concessions

By David Lightman and Kevin G. Hall | McClatchy Newspapers



WASHINGTON — The government will give General Motors Corp. and Chrysler LLC up to $17.4 billion in short-term loans, money that should help them avoid immediate bankruptcy but forces them to restructure dramatically, President George W. Bush announced Friday morning.

"Allowing the auto companies to collapse is not a responsible course of action," Bush said Friday in a 9 a.m. statement before the cameras.

The president will provide carmakers with $13.4 billion now and another $4 billion in February if necessary. The money will come from the Troubled Asset Relief Program, which Congress approved in October to help ailing financial institutions.

Treasury Secretary Henry Paulson has opposed using TARP funds outside the banking system. However, Bush said he was faced with the unpleasant choice of government intervention in the marketplace or letting a carmaker fail amid a deep recession and risk leaving even worse economic woes to his successor.

The money amounts to a Band-Aid that should be enough to keep GM and Chrysler operating until March. If the companies can't show financial viability by the end of that month, they'll have to return the money.

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http://www.mcclatchydc.com/227/story/58187.html

[floridablue]

1. So at the end of March

We have the UAW busted at GM. Hmmm, how then will Ford do it since they aren't taking the bailout. They are in great position to increase market share and make it out, but will have to break the unions top tier of wages to do it.

[rurallib]

2. anyone surprised at that?