The first draft of the automaker bailout bill is out and late last night, congressional Democrats and the Bush administration were reviewing changes that would put the auto industry’s future under great government scrutiny and may even give Washington a majority stake in GM or Chrysler.
Michigan lawmakers said that while the first draft needs some changes, they were hopeful that a bill could pass Congress within the next few days to eliminate the possible loss of 400,000 jobs in the state and 3.3 million nationwide.
Some things in the first draft may anger Detroit. Bonuses have been cancelled for all 25 top executives in each company; the government could call back its loans if it feels that the companies are falling behind in the restructuring efforts; and the government loan will have priority over all previous debts.
If passed, the bill would give GM and Chrysler the $14 billion they need to survive until the end of March. As reported before, FoMoCo is in good shape for now but has asked for $9 billion if economic conditions get worse.
Word of a possible loan package has sent GM and Ford shares soaring on Wall Street. GM was up 21 percent to $4.93 and Ford was up 19% to $3.10.
Source: Detroit Free Press