Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

Quick Hits: Government Says No To $10 Billion Handout for GM


Brief scrutiny of today's headlines.


It looks like the possible merger between General Motors (GM) and Chrysler is on hold.

The US Treasury Department has rejected a request by General Motors for as much as $10 billion to help finance its possible merger with Chrysler, the New York Times reports.

Instead, the Treasury Department says the Bush administration will attempt to speed up the $25 billion loan program for fuel-efficient vehicles. Congress approved the measure in September. It will be administered by the US Energy Department.

Reportedly, Treasury officials are reluctant to expand the $700 billion rescue package to include industrial companies - or to play a role in the General Motors-Chrysler merger, which would probably result in tens of thousands of job cuts.

President Bush may not want to take action until after the election, preferring to leave the final decision to the next president. Democratic nominee Barack Obama says he favors boosting aid to auto companies, while Republican nominee John McCain hasn't said he supports aid beyond the $25 billion to develop fuel-efficient vehicles.

General Motors and Chrysler will continue discussions, but a deal is unlikely until Uncle Sam decides what to do, if anything.

In any case, the federal loan to American International Group (AIG) has been used more quickly than anticipated and the company's top executives have squandered taxpayer money on trips to resorts and England, suggesting the company could benefit from some adult supervision. This may have soured the government on making new loans.

It's hard to imagine GM, Chrysler and Ford (F) surviving in their current form - and Uncle Sam may have a hand in the shakeout.

< Previous
  • 1
Next >
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos