Bailout Watch 206: Here's the Deal

Senator Harry Reid has revealed the devilish details of the bailout bill for Motown’s meltdown. First, as predicted here, the Dems are sticking to their guns. They’re insisting that the money come from the preexisting $700b Wall Street bailout, not the $25b Department of Energy Loans (which would incur the wrath of environmentalists everywhere). Under the Congressional bailout plan, Detroit could stick their snouts into $25b worth of Department of Treasury funds exactly one month after the authorization receives the President’s signature (should he decided to so affix). Automotive News [sub] crosses the i’s: “If enacted, the bill would direct the Treasury secretary to accept loan applications from companies three days after it becomes law and would require a decision on the applicant’s eligibility within 15 days. Disbursement of funds would have to occur within the following seven days.” Or what? They turn into a pumpkin? As for those strings attached, they’re no longer of the Jewish maternal nature (i.e. made of piano wire). “Companies getting loans would have to grant stock warrants or senior debt instruments to the government. Top industry executives would have to give up bonuses and golden parachutes; stockholders would receive no dividends.” Oversight board? Perhaps when Harry met Nancy they read TTAC. It’s nowhere to be seen. But there are other caveats…

“On the issue of viability, raised most vocally by the Bush administration, each company would submit to the Treasury secretary ‘a detailed plan on how the government funds requested will be utilized to ensure the long-term financial posture of the company.'” Erect?

And just in case some of those pesky transplants have their beady eyes on bailout bucks… “The bill restricts the funding to automakers and suppliers that have operated U.S. plants for all of the past 20 years. The interest rate would be 5 percent in the first five years and 9 percent thereafter.”

Hmmm. Don’t Honda and Toyota have 20-year-old U.S. plants? They wouldn’t, would they? In a world where the Chinese threaten to gobble-up GM and Chrysler whol e, anything becomes possible.