Anyway, here's the story.
Democratic leaders in Congress said Tuesday they will push legislation next week to use the $700 billion Wall Street rescue fund to bail out Detroit auto makers, and President-elect Barack Obama ordered his transition team to look at ways to aid the car industry even before his inauguration.There are no rules, there are no processes, there is no structure left in Washington, there is only politicians panicking and running about, waving blank checks. The money that was set aside to buy up troubled loans is now going to be thrown at GM and Ford, both of whom are hemorrhaging money.
The moves come as General Motors Corp. has warned that it could face a debilitating cash shortage by year's end. On Tuesday, GM stock fell an additional 13%.GM faces a cash crunch because they spend too much and take in too little. Handing them another $25B or $50B will change ... what? If you want to see why this isn't affecting Toyota, take a look at this.
The big 3 automakers pay far more in labor costs than Toyota. Sounds like UAW has finally killed the goose that laid the golden eggs. What's the solution? Pour more money into the front of GM and watch it flow right out the back. Meanwhile, Barack Obama is looking at effectively nationalizing the auto industry.
Mr. Obama, after some initial hesitation to become publicly involved, is pressing the Bush administration to immediately free up funding through the Treasury, the Energy Department and the Federal Reserve. It is also studying other options, including installing new board members at car companies that receive assistance to ensure compliance with the strings attached to a bailout, including the adoption of a more advanced, fuel-efficient product line.Once government stooges are in place in the board rooms, GM will return to profitability!
Or something like that.