Yes Mr. President, Whatever You Want: Chrysler and GM are totally fine with the President's call for every vehicle sold in America to reach 35.5 miles-per-gallon by 2016. Tom Walsh points out that, they're fine with it because they don't have a choice. Washington is their pimp, and they can promise flying cars that run on laughter by 2016, because they might not even last until 2010. [freep.com]
Happy Republicans Part of God's Plan: Cassy Fiano is young, conservative and her commentary is "smokin' hot." She totally agrees with a recent study that claims Republicans are "happier" than their Democratic counterparts. Cassy suggests that one reason for this might be because liberalism is poisonous. Poisonous, like cyanide or ideas. [cassyfiano.com]
Shoot First, Talk Never: Not all members of the Taliban are bad. For instance, I'm sure many of them have very lovely singing voices. But no, the only good Taliban is dead, dead like newspapers. Stephen Schwartz insists that there is no moderate faction of these medievalist loonybirds, and that diplomacy is not an option. Unless it's a sitdown between a Mullah and a Predator drone. [theweeklystandard.com]
Mike's A Poet, Don't You Know It: Former Governor, presidential candidate, and Fox News Chatty Cathy Mike Huckabee publicly calls on Speaker of the House Nancy Pelosi should resign. And he does so in a poem. A poem! It's basically a sonnet, written by someone who doesn't know what a sonnet is, or has total contempt for Shakespeare. Either way, it would be a better world if all Republicans started writing more poetry. Scratch that. All politicians. [mikehuckabee.com]
Tags: Detroit, Mike Huckabee, Republicans, Taliban, The Blog Hole
Tomorrow's the deadline for General Motors and Chrysler to tell the government how, exactly, they're going to jiggle the whatsit and get their businesses back on the road to solvency.
The Obama administration will not name a "car czar" to help oversee the auto industry's restructuring and will instead create an inter-agency task force to deal with the issue, according to senior administration officials.
This task force will be overseen by everyone's favorite Handsome Tax Elf Tim Geithner, with help from his buddy Larry Summers and an investment banker or some other guy who can do math (better than Handsome Tax Elf Geithner). And this is all just terrible, for obvious reasons.
The hiatus, in which the industry awaited the car czar, slowed progress in restructuring talks between automakers, bondholders and the United Auto Workers union, according to people familiar with the matter. Without someone firmly in charge, the various stakeholders have not felt compelled to come to the bargaining table, these people said.
And really, what else could compel them to sit down and figure out a restructuring plan? The economic fate of an American city, a massive and massively symbolic domestic industry, thousands of jobs, that $17.4 billion IOU?
If there's no rhymey government figurehead, there's really no point.
Tags: Auto Industry, Barack Obama, Detroit, Lawrence Summers, Timothy Geithner
Another day, another bailout! This time the lucky cash-hole is GMAC, the financing arm of former Detroit employer General Motors.
Seems GMAC — which is 51% owned by hedge fund Cerberus Capital Management, which also owns Chrysler — managed to lose almost $8 billion in risky subprime mortgage investments over the past year and a half.
It's like the old saying goes. They break it, you buy it…
The Treasury Department is injecting $5 billion directly into GMAC in exchange for preferred equity shares that pay an 8% dividend. GMAC also is issuing warrants to Treasury in the form of preferred stock. If exercised, the warrants will pay a 9% dividend.
Also, the government will lend $1 billion to GM that the automaker will invest in its financing arm.
But that's not all — have you seen these cupholders?
The GMAC investment commits Treasury to total bailout spending above the $350 billion limit so far by Congress.
Treasury has some wiggle room because $79.5 billion that it has allocated for purchasing stakes in banks has not yet been distributed. Regulators are still reviewing applications from many institutions.
They'd better hurry up. I hear the wiggle house is headed for foreclosure.
Tags: Auto Industry, Detroit, Economy
After weeks of debate and terrible car puns, the government bailout of the auto industry has finally shifted into high gear, as soon-to-be-former president George W. Bush announced this morning that he's ready to pump Detroit with high-octane TARP fuel.
Auto manufacturers will be provided with $13.4 billion in short-term financing from the TARP, with an additional $4 billion available in February, contingent upon drawing down the second tranche of TARP funds.
The firms must use these funds to become financially viable. Taxpayers will not be asked to provide financing for firms that do not become viable. If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury.
Perfectly sensible. If the auto manufacturers use up all the bailout money by March and still aren't making any money, why, we'll just make them pay back the bailout money with- hm.
Maybe we could sell them for scrap?
Tags: Auto Industry, Detroit, George W. Bush, TARP