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November 3, 2008

US Treasury rejects GM/Chrysler Merger Aid

CARS - The Treasury Department has rejected a request by General Motors for up to $10 billion U.S. to help finance the automaker's possible merger with Chrysler, according to people close to the talks. The two American automakers have been hard hit by the automotive recession in the USA.

Instead of providing new assistance, the Treasury Department told GM on Friday, the Bush administration will shift its focus to speeding up the $25 billion loan program for fuel-efficient vehicles approved by Congress in September and administered by the Energy Department.

Treasury officials were said to be reluctant to broaden the $700 billion financial rescue program to include industrial companies or to play a part in a GM-Chrysler merger that could cost tens of thousands of people their jobs.

ERGO!

Does this make sense? The investment banks start screaming recession and lost jobs and get a record $700 billion bailout from the Bush Administration.

The American automotive industry has been screaming recession for almost 2 years now, and when they ask for cash to help out how does the Treasury/White House respond?

A flat no.

That says to me George W. Bush and the Bush Administration doesn't give a damn about American blue collar workers, they only care about their buddies in the investment banks.

If and when General Motors and Chrysler goes bankrupt there won't be just 10s of thousands of manufacturing jobs lost, it will be hundreds of thousands of other jobs lost due to belt tightening in industries effected by the loss of two of America's biggest manufacturers. The steel industry, parts manufacturers, etc., to say nothing of the belt tightening which will squeeze other people out of work.

And even if they don't go bankrupt, but layoff staff and downsize the economic repercussions will be felt across the United States.

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