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Automakers seek additional $50 billion in loans

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Automakers seek additional $50 billion in loans
By KEN THOMAS – 14 hours ago

WASHINGTON (AP) — Struggling U.S. automakers are requesting an additional $50 billion in new loans from Congress to help them survive tough economic conditions and pay for health care obligations for retirees, officials said Friday.

A day after the leaders of Detroit's auto companies and the president of the UAW huddled with House Speaker Nancy Pelosi, D-Calif., and Senate Majority Leader Harry Reid, D-Nev., participants in the meeting said the figure discussed was double the $25 billion they want to cover future health care payments for about 780,000 retirees and their dependents.

Automakers want the new loans included in an economic stimulus package that is now more likely to come together early next year rather than in a post-election lame-duck session of Congress later this month. The $50 billion would be in addition to the $25 billion in loans that Congress passed in September to help retool auto plants to build more fuel-efficient vehicles.

The requests come as auto companies are bleeding cash and jobs. General Motors Corp. and Ford Motor Co. reported Friday that they spent down their cash reserves by a combined $14.6 billion the past three months. Ford said it would slash more than 2,000 white collar jobs.

President-elect Obama said Friday his transition team would explore policy options to help the auto industry. He didn't specifically address the industry's new loan requests but said their hardships affect small businesses and auto suppliers.

"The auto industry is the backbone of American manufacturers and a critical part of our attempt to reduce our dependence on foreign oil," Obama said, speaking in Chicago in his first news conference as president-elect.

Obama's economic transition team includes two allies of the U.S. auto industry — Michigan Gov. Jennifer Granholm and former Rep. David Bonior, D-Mich.

"We are going to be working on how to make sure over the next short period of time and longer period of time this industry succeeds," Granholm said.

During Thursday's meetings, the top executives of General Motors, Ford and Chrysler LLC and the president of the UAW discussed up to $50 billion in loans, participants said. The loans would include $25 billion to help the companies withstand the weak economy and another $25 billion for future.

If Congress approved more loans, it would come with strings attached. Potential protections include limits on executive compensation, awarding the government preferred stock in the companies and a suspension of dividend payments to investors.

Rep. Sander Levin, D-Mich., said lawmakers are focusing on the immediate infusion of $25 billion to help the companies maintain their business operations in the tough economy. He said House leaders are considering amending last month's $700 billion financial industry bailout so that automakers could access it.

"It was a very full and frank discussion which I think ended on a positive note — that action is essential and essential this month," Levin said.

Two business groups, the U.S. Chamber of Commerce and the National Association of Manufacturers, urged Congress to provide immediate support to the industry.

In Chicago, Obama also urged the Bush administration to "do everything it can" to speed up the distribution of $25 billion in loans approved in September to help automakers retool factories for fuel-efficient vehicles.

Congress approved the low-interest loans for U.S. automakers and auto suppliers to help them build more fuel-efficient cars and meet tougher fuel economy standards. But the funding is not expected until sometime next year.

Energy Department spokeswoman Healy Baumgardner noted the agency announced interim rules for the program on Wednesday and said the agency "has done its best to accelerate funding within the confines of the law Congress passed."

Asked about the automakers' meetings on Capitol Hill, White House spokesman Tony Fratto said they were concerned about the "health of the auto industry" but Congress would need to decide whether to provide more help beyond the $25 billion loan program for fuel-efficient cars.

Why should we give struggling companies money because they failed to adapt to the market and poured shitty cars down our throats that got horrible MPG. You don't see the foreign manufacturers doing bad.

This car was made back in '98 that got 70+ MPG. Sure it looks bad, but driving a 20 MPG car won't get you very far for cheap compared to this thing.

Mercedes C250 (CDI)
Acceleration: 0-60 in 7 seconds
Top Speed: 155 mph
Fuel Consumption: 45 mpg

Supporting these big "three" companies because they churned out crap cars and failed to adapt or revolutionize even when times were good is their fault and we should not support giving them any money at all.
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Come on guys I cant believe how wishy washy some of you are. Wishy washy just like the people most of you voted for.

You blame unions and the retirement that they offered. At the same time your against government health care. So what are people supposed to do? Work till the day they die for chump change so they can afford to live? Is that what you really want to do? How many of you actually work at an auto factory that is non union that offeres little benefits and treats you like shit on a daily basis like me? Ill tell you something if you didnt already know, they are suffering pretty bad right now too, even without a union or badass retirement plan. They pay us like shit and treat us like shit.

Some of you hit it on the head though, the problem the big 3 have is they didnt make economic cars. Why didnt they make economic cars though? The government gave them money not to. Why would they do this? Because certain big dog republicans have their hands in the oil business.

So I have a good idea, lets just keep voting republican, keep voting to take away our rights and we will just keep blaming democrats for everything. God all might, I cant believe some people want to try to make our quality of life better and give us the chance to retire!

Have any of yall ever lived in the north where the union is strong? People made good money, retired when they are supposed to and had a great quality of life, way more so than down here from what I have seen.
Peoples greed is what is making this country go down the shitter. It dont matter how much you bail out big companies, it dont matter how cheap you make it for them to produce a car, none of that matters because if the people cant afford to buy the damn things once they are produced we are in the same predicimate. When people are struggling to pay their bills and dont know when their asshole bosses are going to fire them at a whim due to the right to work laws and the lack of rights employees have the last thing they want to do is pick up a 6 year loan payment on a new vehicle.

Right now we got what we need. A democrate in office (well in january) that will hopefully do what he is supposed to do and help out the middle class (the majority of the united states).

Sure, I know Im going to get flamed for this because Im a minority in tennessee as far as my views. Oh well, more then 50 percent of the united states feels the same way as me however.
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Id just assume not see them exist as a company anymore if it means that the way they accomplished staying a company means they get to back out of the retirement plan that their previous employees were promised and worked to earn. If they go out of business, some other company will fill their shoes, hopefully doing things right instead of seeing what was the final straw. They should offer the union and good retirement, just not make pigs of cars that get horrible mpg.
All I have to say is good. The union is protecting the people like its supposed to. These people have given GM their lives just so gm can fire them if times get tough due to their own bad decisions. Tough shit. Im glad the union is there, that is why people vote it in. How many fucking cars does gm plan to sell if no one has jobs?

I mean I really cant believe everyone thinks all the companies should just fire everyone and everything will get better because they arent having to pay out much money in labor. Who the hell is going to buy the product then? If companies let everyone go, the economy dont get any better because people have no money to spend and now people are un employed and going to have to resort to getting money from the government in order to feed their family, that is if the government dont give all the money to the big businesses first.

I still feel that the gas prices are what cripled the country. People couldnt hardly afford to get to work, they didnt have the extra money to buy stupid shit that makes the economy better, they damn sure wernt about to go buy a gas guzzling vehicle brand new ect.
It was the gas people. All I hear is people bitch about all the other things that are here for us in order to have a good quality of life as the reason for the bad economy. No, its corperate greed.
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I guess the reason It hurts me so bad to hear this is because I work at a automotive factory without a union that is doing just this right now. That is why I asked how many people actually work at one that is doing this. People throw that out there and act like its the best thing to do but I dont think they have any idea how stressfull it is and what kind of bullshit they are doing to peoples mothers, fathers, grandparents ect. Everyone that works there. They are getting treated like shit in hopes that they just quit instead of laying them off like they should just because they want to prevent them from getting un employment. Its complete bullshit. They have me looking for another job for sure. Im going to end up in jail for killing someone if I continue working there.
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