Bailout Watch 313: More Auto Industry Bailouts On Their Way!

Robert Farago
by Robert Farago
bailout watch 313 more auto industry bailouts on their way

We’ve already flagged the fact that Delphi may be lining-up at the federal bailout buffet, what with GM depending on it for its survival, and the survival of GM and Chrysler being all that matters when it comes to taxpayer trough snuffling. Our TTAC radar is picking up more blips on the domestic auto industry bailout bucks front. In a report revealing that Chrysler is having a little trouble finishing the paperwork on their $4b bonanza, Wall Street Journal writer Jeff Bennett drops this little McNugget in the middle of his piece (just below the snooze button): “Meanwhile, the Treasury Department said it will decide on a case-by-case basis whether other companies connected to the struggling automotive industry should be provided emergency aid from the $700 billion bailout pot.” So that’s not a no. Of course, that depends on the Treasury Department receiving congressional authorization for the second tranche from the aforementioned trillion dollar-ish Troubled Asset Relief Program fund. ‘Cause they already “spent”– sorry, “invested” $354b of the $350b previously authorized. Paperwork, eh? Meanwhile, what’s the WTO going to make of all this?

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4 of 11 comments
  • Lw Lw on Dec 31, 2008

    More cash pumping! When the national debt hits $20T, will anyone care? $10T went by with hardly a whimper.... I have this vision of Obama spending the next four years writing checks... He might want to get one of those handy "stamps" to avoid cramping up. This might be a good time to buy a key supplier for nothing, apply for a few billion, split the cash with Chavez and set yourself up in Venezuela.

  • Edward Niedermeyer Edward Niedermeyer on Dec 31, 2008

    The WTO's glacial fury isn't the only international trade consequence. Unilateral or multilateral tariffs and other sanctions will be where this rubber hits the road. The (fairly) recent unpleasantness with steel industry protectionism leaps to mind. Come to think of it, what do you want to bet that auto biz lobbyists were singing the praises of free trade when that was going down? And Bush folded. At the time I remember thinking that the whole steel tariff idea was just a friendly NSFW to the "international community" and that he had probably learned something about playing with others. I was wrong, obviously.

  • Lw Lw on Dec 31, 2008

    I'm not sure the WTO matters... If nobody is buying much of anything from anyone, well there won't be much to gripe about.

  • Ronin Ronin on Jan 01, 2009

    It's all just an excuse. The Fed and Congress and the Administration are desperate to fight deflation (a deflation it abetted) even though the effort is doomed to failure. Even though this steps on the necks of future generations of American [s]citizens[/s] consumers. It's about keeping the banks solvent, which Constitutionally is the number one duty of government. So this is an excuse to flood money created out of air to any companies far and wide. A few years ago Bernake talked about helicopter drops of money. This is it. This is how it looks. Within a year or two as a result the dollar will be crushed and inflation will make 1980 look like a boy scout. We always hear that Bernake is a student of the Great Depression. And it is apparent that in all his studies he has come to the conclusion that he could have created a better one.