The back and forth of the Big 3 Bailout talk has come to a head. Bush today has signed the $17.4 billion auto industry bailout package to rescue mainly GM and Chrysler so that they may “live to see another day”. Of the total $17.4 billion, $13.4 Billion in federal loans will be ready almost immediately so GM and Chrysler can stay afloat into the new year (2009).
GM is to get $9.4 billion from the first allocation of the federal loan money leaving Chrysler with $4 billion for the taking.
The terms of the loans are for three years but the money will have to be paid back in full in full if the firms do not show themselves to be viable by March 31st. This means if all fails and they do not show some real results by March 31st, they will have 30 days to pay back the money in full. This means the companies will more than likely have to negotiate new agreements with the unions and creditors to make this happen.
Other conditions were set in place for the loan to actually happen. Each must submit their ideas by Feb 17th for their plans to become “viable” and profitable by this date. This means they will have so REAL work to do in the upcoming weeks. Wonder what kind of blow-out year-end sales will be happening on the dealership lots?