Posted on 11/19/2008 9:36:04 PM PST by bruinbirdman
The chances of the US Congress quickly approving a bill to save the "Big Three" car manufacturers are said to be "remote" but one economist warned that their collapse could shave 4pc off America's gross domestic product next year.
Democrat Senator Chris Dodd, who chairs the influential Senate banking committee, believes that the chances of Congress approving a new bill this week to advance up to $25bn in lifeline funding to Ford, General Motors and Chrysler are slim.
"I'm anxious to see something happen," said Mr Dodd, who on Tuesday heard pleas for the money from the leaders of the trio of companies plus United Auto Workers union chief Ron Gettelfinger. "But frankly, the idea that there's going to be a bill, I think, is remote," he added.
His comments came as a Deutsche Bank economist quantified the impact of the collapse of the trio on the American economy.
Deutsche's Joseph LaVorgna estimates that if the auto-makers were to file for Chapter 11 bankruptcy protection in the first three months of next year, it could cause US GDP to shrink by at least 4pc as auto production would fall by 30pc to 35pc.
He also believes unemployment would immediately leap from its current level of 6.5pc to as high as 8.25pc.
The analysis came as the heads of each of the three carmakers spent a second day on Capitol Hill pleading with politicians for the funds, this time before the House financial services committee.
The hearing got off to a good start when committe chairman Barney Frank suggested that there was an inherent anti-working class bias in the current debate, given how swiftly money was advanced to the banking sector: "Frankly, there seems to me to be an inherent cultural bias. Aid to blue-collar employees is
(Excerpt) Read more at telegraph.co.uk ...
With DODD acting like Savior, I’d rather watch them all go down... A good BANKRUPTCY, would get them out from under the UAW’s THUMBS, and a good reorganization... They are not Going ANYWHERE...
As for DODD, you should be Perpwalked with Frank, Raines, Gorelick and Schumer for the Fanny/Freddy Destruction
Already in December, the vehicle sales data seemed to be regaining traction.
Joseph LaVorgna
We aren’t overly concerned by this slowdown. It’s hard to see consumer spending not bouncing back in the first quarter.
Joseph LaVorgna
While consumers are forking over a lot of money on gasoline, they continue to spend elsewhere, ... This tells us that job and income prospects are better than what is commonly understood.
Joseph LaVorgna
The economy is doing fine and the labor market is on the mend.
Joseph LaVorgna
The key here is the salvation of the UAW.
Is it little wonder why neither dems or republicans
explain the benefit of bankruptcy filings?
Where’s the voice of messiah? With the market tanking under
DOW 8000 the “one” has no inclination of stabilizing the jitters.
Obama has to be peeing himself right now with all of this coming at him at once. He has about $800 million favors to repay.
**The key here is the salvation of the UAW.**
UAW has NEVER been a friend to the GOP.. so GOP should Stand up, GROW A PAIR, and Let the TRUTH FLY!!!
File Chapter 11, get it over with and start by selling the corporate jets and flying coach.
Chapter 11 gives them time from creditors to restructure but would probably, rapidly lead to Chapter 7. That would put GM in the hands of the bondholders for liquidation.
Know anyone who would like to buy an whole automobile factory?
yitbos
All I want is a 2008 white Denali with black leather for $5000.
I say make them drive their own cars!
every time the democrats support a corparate bailout its being dressed up as helping the little guy
That's where I'm at. Don't give Detroit a single penny. If the govt insists on indebting us 25bn, give it to the citizens in the form of a massive discount on US autos. That way, we'll clean the lots out, spreading the wealth from the dealerships right up the chain. Detroit should get enough $ out of it to keep the lights on and maybe this time around, build some cars we'd pay retail for.
New headline: Boeing needs bailout, warns of impending doom to lack of demand, cites flood of used corporate jets on the market
Exactly! 25 billion!. Give 15,000 to a million families who need a new car, with the stipulation that they buy a car from one of the Big Three within three months.
Talk about an economic stimulus! But no, they’re just going to hand checks to the CEOs.
Lots of dealer lots loaded with cars and trucks.
Maybe you’ll find a good deal at an auction.
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