Thursday, October 30, 2008
"No more" means "a lot more" in market bailout lingo
Surprising news out of Washington today is that the U.S. Treasury Department is not interesting in subsidizing General Motors Corp.'s proposed acquisition of its long-ailing competitor, Chrysler. The Bush administration told General Motors that it could get enough money to survive from the $25 billion in factory retooling funds approved by Congress last month, according to the Reuters international news service. The administration will try to speed up distribution of that money, an unnamed official told Reuters, but does not favor giving the country's largest automaker any more money. General Motors asked for the $10 billion earlier this week, on top of the $25 billion intended to help lubricate the development of fuel-efficient cars, industry sources told Reuters. "Treasury is not negotiating with the automakers, the administration is working to get the $25 billion Congress already authorized to the industry," the official said. But the Treasury Department also confirmed that GMAC and Chrysler Financial, the financing arms of the two companies, would be eligible to sell distressed loans to the government under the administration's $700 billion market buyout plan if they registered as bank holding companies, Reuters said, making that "no more" seem disingenuous. GM has already begun the registration process, Reuters said. To add to the looming cost, ailing Ford Motor Co., the nation's second-largest automaker, also said Thursday that it expected a "degree of parity" if the government gave billions of dollars to GM.