The three American automakers presented a plan to Congress yesterday for a bailout request of $34 billion. GM and Chrysler have indicated that without the bailout, they will be forced into bankruptcy before the end of this month. Tomorrow, the companies' CEO will testify once again before Congress.
Chrysler is a private company. The company was taken private when Cerberus bought Chrysler from Daimler Benz several months ago. Why are the taxpayers being put on the hook to bail out a private equity-owned company?
Isn't this just money down a rat hole? If the automakers want a bridge loan, then where is the bridge to? And since the government doesn't have the money to fund the bailout, the only way they can do it is to borrow even more money. Doesn't the government need a plan to avoid bankruptcy even more than the automakers?
Click here for a great Wall Street Journal editorial on why it won't work.
Wednesday, December 3, 2008
$34 Billion Big Three Bailout Pricetag -- For Now!
