Damn! What is it with the Bush administration?
Senate Republicans rightly stopped the auto industry bail last night and today the Bush Administration decides to use TARP funds to throw a life line to GM and Chrysler.
Despite the abrupt death last night of bailout legislation in Congress, it seems the Big Three car makers will still get billions of dollars in rescue funds from Washington.
The Treasury Department said Friday it will provide an unspecified amount of money to the cash-strapped industry, Fox Business Senior Washington correspondent Peter Barnes has learned from a source close to the discussions. It was not immediately clear from which funding source Treasury would get the money.
Still, industry experts are deeply skeptical that emergency cash is the answer to the myriad ills plaguing the industry.
“They’ll get the money, but it’s a very dangerous proposition. It’s a very complicated mess,” said David Magee, author of How Toyota Became #1.
In the wake of the failure of a $14 billion bailout bill in the Senate Thursday night, the Treasury Department said Friday it was prepared to step in and prevent a collapse until Congress takes up the issue again. Read the rest…
It’s a sad reality but Billions in taxpayer dollars aren’t going to save the Big 3… They need to drastically restructure, bankruptcy is the only way for them get that done in the time frame required.
Update: Larry Kudlow posting at the Corner says there’s no deal yet:
Media reports and Wall Street investors are now assuming the Treasury will put up $15 billion in TARP money to keep the Detroit carmakers out of bankruptcy. But my sources tell me that the TARP deal is not done — not by a long shot.
At a minimum, it’s going to take the Treasury several days to walk through the financial numbers and gather all the facts before it takes any action. The Treasury wants to see the cash-flow data and get to the truth about GM and Chrysler. (Ford doesn’t need the money.) And nothing will happen until these numbers are properly crunched. And the Treasury may well want to arrange for a built-in monitor — something that might even look like a car tsar — if any TARP money is dispersed.
Senate sources tell me that any TARP-money allocation might include the very same conditions proposed by Tennessee Sen. Bob Corker in legislation that broke down in a marathon session in the Senate list night.
So folks shouldn’t count their TARP eggs before they’re hatched. And nothing is expected to be announced today.
Assuming Kudlow is right this is good news.