Looks it will be very Merry Christmas and a Happy New Year for Detroit. President George W. Bush announced today a $17.4 billion emergency loan that will help GM and Chrysler from going bankrupt while saving hundred of thousands of jobs.
Chrysler and GM are expected to access the money immediately while Ford said that its liquidity is adequate for now and did not need a loan at this point. A total of $13.4 billion will be made available in December and January from a $700 billion Wall Street bailout or TARP.
“If we were to allow the free market to take its course now, it would almost certainly lead to disorderly bankruptcy and liquidation for the automakers,” Bush said. He said that doing nothing would deepen and prolong the U.S. recession.
There are a couple of strings attached to the bailout. For instance, Bush said that if the companies don’t prove that they can restructure their businesses by March 31 (or a total of 102 days), the loans will be called back.
Follow the jump for a video from Reuters for more information.