"Dwindling reserves," of the $700 billion rescue fund, says Automotive News, will likely be the source for additional auto industry bailout money that the Obama Administration yesterday signaled will likely be going forward. Deadline for the formal announcement is March 31. They're turning to the $700 billion funding rather than facing a sharply divided Congress with requests for more bailout funds.
Bob NardelliEnlarge Photo
The concept of more auto bailout money is quite toxic according to American Enterprise Institute fellow Norm Ornstein. He claims Chrysler and GM execs' popularity is little higher than AIG's with members of Congress, and cites again their "boneheaded" decision to fly to Washington last fall in private jets before showing up with tin cups in hand.
Automakers Chrysler and General Motors are asking for $21.6 billion more in funding to stay afloat as auto sales continue with dismal numbers. The Federal government extended $17.4 billion to them in December for the same reasons.
Ornstein says that Obama wants to avoid dealing with - and to - the corporate "fat cats who have screwed up everything." But one risk of drawing from the shrinking $700 billion fund is depleting it sooner, forcing added requests for money for the equally troubled financial and housing sectors.
[source: Automotive News]