Monday, March 30, 2009

No More Money for Chrysler and GM

Obama will make an announcement this morning about the fate of the automakers at 11 am.
The question everyone seems to be asking now is: why isn't Obama firing banking execs? I suspect the Obama administration isn't firing banking execs because while they're greedy they're not incompetent. But the automaker execs seem to be clearly incompetent.
The car companies are going to get extra time to come up with better plans. For Chrysler it's merge with Fiat or else.
NYT: The White House on Sunday pushed out the chairman of General Motors and instructed Chrysler to form a partnership with the Italian automaker Fiat within 30 days as conditions for receiving another much-needed round of government aid.

The decision to ask G.M.’s chairman and chief executive, Rick Wagoner, to resign caught Detroit and Washington by surprise, and it underscored the Obama administration’s determination to keep a tight rein on the companies it is bailing out — a level of government involvement in business perhaps not seen since the Great Depression.

President Obama is scheduled to announce details of the auto package at the White House on Monday, but two senior officials, offering a preview on condition of anonymity, made clear that some form of bankruptcy — a quick, court-supervised restructuring, as they described it — could still be an option for one or both companies.

Mr. Obama’s auto industry task force, in a report released Sunday night assessing the viability of both companies and detailing the administration’s new plans for them, concluded that Chrysler could not survive as a stand-alone company.
The report said the company would get no more help from the government unless it can finalize a proposed alliance with the Italian automaker Fiat by April 30. It must also reduce its debt and health-care obligations.

If a deal is reached between Chrysler and Fiat, the administration says it would consider another loan of $6 billion to Chrysler.

Jennifer Granholm is mad, calls Rick Wagoner a "sacrificial lamb:"