President Bush has announced plans to provide emergency help for the troubled U.S. auto industry, a week after a $14 billion rescue plan for the automakers failed in the U.S. Senate.
President Bush said the government will provide loans to the troubled automakers in exchange for concessions, including the restructuring of the companies to achieve long-term viability.
Automakers given deadline to re-pay loan
The loans, totaling $17.4 billion, will come out the $700 billion rescue package recently passed by Congress. He says the companies will have until March 31 to come up with viable economic plans or they will have to re-pay the money.
Mr. Bush says under more favorable economic circumstances, the government would not intervene and a private enterprise would be allowed to fail. But he says this is an exceptional case.
"These are not ordinary circumstances," he said. "In the midst of a financial crisis and a recession allowing the U.S. auto industry to collapse is not a responsible course of action."
Bush seeks protection of hard-working Americans
The U.S. auto industry and the companies that provide parts, materials and services account for millions of jobs for American workers. Mr. Bush said a disorderly collapse could bring an "unacceptably painful blow" to hard-working Americans far beyond the auto industry and hurt the already battered U.S. economy.
"It would worsen a weak job market and exacerbate the financial crisis. It could send our suffering economy into a deeper and longer recession and it would leave the next president to confront the demise of a major American industry in his first days of office," said Mr. Bush.
Automakers announce holiday closures
General Motors and Chrysler have been in talks with the White House since the $14 billion rescue package for the auto makers failed in the Senate last week.
The companies, on the brink of bankruptcy, are suffering from slow sales and are running short on operating cash.
General Motors, Chrysler and Ford make up the "Big Three" U.S. automakers. All of the vehicle giants have announced extended holiday closures as they deal with the economic turmoil that has dealt such a harsh blow to the United States and beyond.