US makers may get access to $25bn 'green' loans
5 December 2008

The US Congress has made it clear that it will provide "short-term and limited assistance" to the US car makers as they attempt to restructure.

General Motors, Chrysler and Ford bosses have just finished two days of meetings with the Democrat and Republican law makers in Washington.

The breakthrough in negotiations came at the end of the second day when house speaker Nancy Pelosi ceded to President Bush's demand that any bail-out package must be funded from the $25bn set aside to fund environmental car development and retool old factories.

A series of conditions are likely to be attached to any funding, such as strict limits on executive remuneration and perks.

It is also likely that an extra condition will prevent the car makers from using any of the money, which was originally packaged to promote the development of more fuel-efficient cars, to challenge states that are implementing tougher emissions regulations.

“We will not permit any funds to be borrowed from the advanced technology programme," said Pelosi, "unless there is a guarantee that those funds will be replenished in a matter of weeks so as not to delay that crucial initiative."

This suggests that one of Barack Obama's first acts as president of the US will be to enable a much more comprehensive package. Officials are working on the current legislation over the weekend, in time for the Senate to reconvene on Monday.

Talk of a merger between Chrysler and GM as a potential solution is still circulating Washington, and Chrysler has made it clear that it could support such a move.

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Comments
26

5 December 2008

Fat, bloated and should be left to collapse. Only themselves to blame.

5 December 2008

Like car like driver then in most cases! So much for the American dream...

5 December 2008

The knock-on effects of just one of them collapsing would be devastating. These guys and their supply chain employ millions of workers across the US, let alone the rest of the world. Sad to see the typical armchair critics above with the stereotypical old 'bloated American manufacturer' claims. Undertones of anti US sentiment as usual.

5 December 2008

I understand the unions being opposed to a merger cause it will create lots of job losses, but surely, if they didnt and GM went under cause a chain reaction, there would far more job losses. A bit short sighted I think.

5 December 2008

Yeah I read similar reports on the BBC News website. Stupid unions!

5 December 2008

[quote julianphillips]Undertones of anti US sentiment as usual.[/quote]

Would that be so surprising given what has been done in America's name in the last decade alone?

Let's be honest America is pretty sh1t at manufacturing. It's been surpassed by the Japanese and the Europeans. America's heyday was after WWII. It took the principles of scientfic management, the moving assembly line and exploited their advantages over 19th century cottage industry makers around the globe. Up until the late Sixties it was number one in most consumable goods markets.

After Vietnam and the money printing to pay for it, inflation took off, compounded by the Arab/Israeli wars driving gasoline up many fold overnight. That spelt the end of American maufacturing prowess, that relied on heavy energy input, and the power of the American consumer to consume without racking up debts, through borrowing. It's all been downhill since.

America in many ways reflects the decline of Great Britain after WWI. Loss of markets to Germany and the US and inferior, outdated manufacturing processes meant real declines in living standards, which were disguised in large extent until after WWII and Britain was truly broke.

America for the past 35 years has relied on finance, to allow its people to live beyond their paycheck means indefinitely and an ever larger military budget to fund all the weapons programmes and all the contractors. When one spends $1 trillion a year on hardware, it is likely that some 'world-class' products will pop out, from the Hmvee to the Apache helicopter. But when it comes to the civilian market the US has long fallen behind. The once dominant Boeing last splashed hard with the Jumbo jet, nearly 40 years ago. The engineers at Airbus made the move to fly-by-wire and composite materials. Boeing is attempting to catch up with the Dreamliner but behind the scenes chaos reigns.

America has reached the stage where after having briefly earned some real bucks from the computer boom of the 80 and 90s, what remains is nearly all off-shore manufacturing and an almost total reliance on finance, financing and ever more complex financial products. Hence, when it comes time to holding out begging bowls, Wall St., the centre of the financial web, bags $8.5 trillion to date but the remnants of American high value-added manufacturing must jump through hoops for a measly, in comparison, $30 billion.

Beyond beverages, like Coca-Cola or Starbucks coffee, or the 'restaurant' sector, like McDonalds and Wendys, I challenge anyone here to name a truly American product that has undisputed leadership in its field.

5 December 2008

iPod (yeah OK I know it's not made in the US!) I share some of those sentiments, though a lot of them could be applied to the UK. I'm not an expert on US amnufacturing, but I know a little about the aircraft industry. I believe Boeing will recover/are recovering - slowly - and should do OK over the enxt decade or so.

5 December 2008

'Beyond beverages, like Coca-Cola or Starbucks coffee, or the 'restaurant' sector, like McDonalds and Wendys, I challenge anyone here to name a truly American product that has undisputed leadership in its field.'

Pharmaceuticals (alot of manu & most r&d in US). Software (microsoft), hardware (intel).

That enough?

5 December 2008

Arm & Hammer - best selling baking soda-based toothpaste

5 December 2008

Film industry is another. I'd also rate many of the automtoive US consultant suppliers to the global industry as being near top of their games.

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