Bad news for the auto industry…
The Huffington Post reported recently that Democrats in the US are looking to the beleaguered Auto Industry but it looks like Bush might only let it pass if his plan for a trade agreement with Columbia passes… not something the Dems want by any stretch of the imagination.
Obama’s aides said the president-elect brought up the issue with Bush during their two-hour White House talks on Monday, expressing his view that action is needed now, not just to help the U.S. companies but also the broader economy, because of their enormous reach. Obama raised the idea of an administration point person on autos with a portfolio aimed at improving the long-term health of the companies.
Bush repeated his position, recently stated by staff, that he is open to helping the automakers.
In addition, amid discussions in Washington over whether new economic stimulus spending is needed, Obama focused in his meeting with Bush on his desire for it while the president stressed that his main priority for any postelection action out of Congress is approval of a long-stalled free trade agreement with Colombia, said people familiar with the conversation between the two men. The sources declined to be named publicly because of the private nature of the talks.
The outlines of the conversation between the 43rd and soon-to-be 44th presidents shows just how starkly different are policy and philosophical approaches of the two men, one Democrat and one Republican. Obama has opposed the Colombia free trade agreement while Bush has remained skeptical of the need for additional stimulus.
However it might be time for Bush to reconsider his policies after the NY Times reported that the loss would be huge if GM were to fold (understandably):
A bankruptcy filing by a single Detroit car company could cost the economy $175 billion in the first year of the legal case in lost employee income and tax revenue, the Center for Automotive Research estimated this week. Given the complexity, a G.M. bankruptcy case could last three years or more.
Lehman Brothers anyone?
A bankruptcy also could jeopardize the fate of a health care fund created in 2007 that was supposed to shift a $100 billion burden off the companies’ backs. The U.A.W. recently agreed to let G.M. delay payments to the fund.
Perhaps it’s time to release that $25 million in loans for retooling and increased fuel efficiency, but considering how badly they’re haemorrhaging it might not even be enough to buy them time; a slice of that $700 billion pie anyone?