Bush Administration taking time to get it right.

The White House announced Friday that it would give aid to the distressed automakers but is going to take its time in order to get the package just right. They are meeting with the Big Three and trying to determine the amount of the loan as well as stipulations on its use. Look for an announcement on Monday of the details of this bailout.

From Automotive News:

Administration officials were gathering financial information from the automakers and assessing data such as their cash position, said Tony Fratto, a spokesman for President George W. Bush.

"We'll be focused on trying to get the policy right while considering the best interests of the taxpayer and our economy, and we'll take the time we have available to do that right," Fratto said. "No decisions have been made."

Bush Administration Steps up to the Plate for US Automakers

The Bush Administration acted quickly and without hesitating. Late Friday afternoon, the White House announced that it would help the Detroit Three and not allow them to file for bankruptcy. My hat goes off to President Bush for his decisive action and making the announcement before the weekend. Even the stock market had a chance for a small rally before the closing bell. Basically, the White House reversed its prior stance of not touching the TARP funds and will probably use these monies for the bailout/loans.

Bush's spokeswoman Dana Perino said, ""A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time." Finally, someone with a bit of sense lets her voice be hear. She continues, "...the federal government may need to step in to prevent an immediate failure, the auto companies, their labor unions, and all other stakeholders must be prepared to make the meaningful concessions necessary to become viable."

This weekend, Administration officials are talking with the Detroit Three concerning conditions that must be met to receive aid and have not made final decisions on the size or duration of the package. What to look for is how quickly the Administration can get the funds to GM and Chrysler, who admit to being on the brink of financial collapse. With little more than two weeks left in the year, it looks like there is time to make the loans available.

The prominent Senator from Michigan, Carl Levin - D, had this to say, ""The effort to provide emergency bridge loans to U.S. automakers is still very much alive. I am encouraged that the White House said today that they will consider other options to assist the auto companies, including use of the TARP program."

GM has announced it would produce 250,000 less vehicles in the first quarter of 2009 and temporarily close 20 plants in Canada, US and Mexico. Some plants would even be closed for the entire month of January. Sales figures for ALL of the automakers selling vehicles in the US are down, ranging from 30 to 40 percent less than last year. The automakers are now scrambling to cut production and costs in reaction to the slumping sales.

White House considering use of TARP funds for Auto bailout

From the beginning, the White House was opposed to using any monies from the TARP fund for the auto industry but now, it seems they have changed course. The Bush administration wanted Congress to use the 25 billion that was approved for "re-tooling" the Big Three so that they would build more efficient vehicles. Unfortunately, Congress was dead set against that idea. So the next move was for Congress to pass new legislation that would give the automakers up to 34 billion in loans to avert bankruptcy. As we have seen, this number was reduced to 14 billion to see them through until the Obama administration could get in place. Now, in a shocking and stupefying move, a minority of Senate members have killed the 14 billion dollar bill.

These few Senators have decided they would rather micromanage the Detroit Three and tell them how to run their business and also dictate what union members should be paid. Instead of doing the right thing, these Senators have shirked their responsibility and are willing to see our economy sink to greater depths.

Make no mistake, the US auto companies will crash and burn without assistance and it could happen in a matter of weeks, which precludes Obama's team being of any help or consequence. If GM and Chrysler fail, then think of the jobs that will be lost, the companies that will fold and the impact it will have on our society and economy. I am reading every day of companies that announce massive layoffs like Bank of America, who announced today that 35,000 will lose thier jobs. Does Congress really want to see 500,000 more jobs lost from the auto industry?

Now, the only option left is the White House, who could carve out a small percentage of the monies from TARP and give it to the Big Three. TARP is the 700 billion dollar Troubled Asset Recovery Program which was really a bailout and FREE money given to evil, crooked banking institutions. Dana Perino correctly stated this morning, "A precipitous collapse of this industry would have a severe impact on our economy, and it would be irresponsible to further weaken and destabilize our economy at this time."

I incorrectly thought that our Congressional leaders would approve a bailout bill and now I think that the White House will provide funds for the auto industry. I just hope I am not incorrect once again!

Tell me what you think. Will the White House and Bush Administration save the day?

We Have an Agreement! Auto Bailout now on Track

Late Tuesday night, the White House and Congressional leaders were able to come to terms in fabricating the so called Auto Bailout Bill. Actually, the bill will have a more formal name once it is presented in the House and Senate. This is very good news indeed and we can look for a vote as early as today (Wednesday). Most of the terms in the agreement are the same as we have already heard, that it will be 15 billion, there will be a car czar, no big bonuses for the CEO's, etc.

From Automotive News:

"The White House and congressional Democrats on Tuesday night reached an agreement in principle on a $15 billion proposal for bailing out U.S. automakers and forcing them to restructure or fail, officials said.

A Bush administration official and a Democratic leadership aide said the outline covered key points but final issues needed to be resolved and put in writing.

Democrats have arranged to have the House of Representatives vote on a bill as early as Wednesday and send it to the Senate for consideration.

..."Bipartisan hard work has paid off," said Democratic Sen. Carl Levin of Michigan whose home state headquarters General Motors, Ford Motor Co. and Chrysler LLC.

"I understand an agreement has been reached," Levin said in a statement.

The bailout is designed to allow GM and Chrysler to avert threatened bankruptcy through March with short-term loans. Ford Motor Co. is not requesting immediate help but would like a $9 billion line of credit in case its finances worsen.

The parties that negotiated the tentative deal agreed last week that the money would come from an Energy Department fund established in September to help Detroit make more fuel-efficient cars.

The administration official said the negotiators satisfied the key White House concern in the talks that companies receiving aid obtain the necessary concessions and make other changes to prove they can survive and compete.

In addition to providing loans, the proposal would force automakers to answer to a presidentially appointed trustee -- or "car czar" -- and make the government their biggest shareholder.

The overseer will have powers to shape a restructuring of the companies, withholding further loans if progress toward a turnaround stalled.

A major provision would permit the czar to recommend a bankruptcy restructuring if companies borrowing money fail to obtain the necessary concessions.

Some Republicans wanted some sort of bankruptcy option included as an incentive for labor and other stakeholders to agree on givebacks."

Stay tuned, as always. Hopefully we will have the results of the votes by the end of this week.

BREAKING: Democratic Leaders and White House Agree on 15 Billion Dollar Auto Aid Deal

They asked for twice this much but 15 to 17 billion will have to suffice. This amount will keep the Detroit 3 in business until Obama's administration can put together a more comprehensive package.

From Yahoo:

"Democratic leaders and the White House reached a deal to provide billions of dollars in relief to the ailing U.S. auto industry, a senior congressional aide told Reuters on Friday.

The package, which Democratic leaders hope to win passage of next week and send to President George W. Bush, totals between $15 billion and $17 billion, the aide said, speaking on condition of anonymity.

The amount is far less than the $34 billion requested this week by General Motors, Ford Motor, and Chrysler, but Democratic leaders believe the money will keep them going until Barack Obama replaces Bush as president on January 20 and a new effort can be made for a rescue plan."

This is a pretty good compromise between the Bush Administration and Congress that ensures the viability of US automakers for the next 6 to 8 weeks. Hopefully, Obama's team can then rush through better and more complete legislation. I hope the next package contains verbiage stipulating better mileage vehicles and alternative energy cars and trucks like pure electrics.

It appears to me that this was all the lame duck Congressional session could agree to, although I feel they could have done more.

What happens today in Congress?

Today is a big day in the United States for the auto industry. We have seen fierce lobbying from all sides this weekend for and against any Federal bailout. The White House is saying that the 25 billion earmarked for "re-tooling" the automakers in order to make more fuel efficient hybrids should now be used instead as immediate emergency funds. Nancy Pelosi disagrees and wants to sap some funds from TARP, which of course, was originally designated for the banking bailout. What a mess.

Barack Obama appeared on 60 minutes yesterday and had this to say, ""We need to provide assistance,...But I think that it can't be a blank check.''

Sorry Barack, but every time Congress creates any buyout like this, it winds up being a blank check for someone.

As soon as I hear any news about today's Congressional hearings concerning the blighted US automakers, I will post ASAP.