As you read this the US Congress and the White House – still under the control of George W – are conducting hand-to-hand policy combat over the details of a bill which will see $15bn handed over to GM and Chrysler to prevent their immediate collapse.
Ford, for the moment, may not ask for a loan, though it might, next year, ask for a ‘line of credit’ as a fall-back.
However, this is no British Leyland-style hand-out.
As it stands, the strings attached to this loan are extraordinarily detailed and restrictive.
First off, the US government will appoint a ‘car Czar’ (either a single officer or group) to oversee the rescue plan and dole out the loans.
This Czar also will have the right to veto any transaction over $25m carried out by the car makers, and also will have to be supplied with any ‘information demanded’.
The loans will be spread over seven years and charged at an interest rate of five per cent for the first five years and nine per cent after that.
Share dividends will be suspended, no bonuses can be paid to the 25 highest-paid executives, there’ll be no handsome pay-offs and all corporate jets will have to be sold off.
Any car maker taking the loans will also be banned from ‘participating in lawsuits against states over emissions standards’. That refers to the move by California to try and set its own super-stringent emissions regulations, something all car makers are keen to deter.
There are also strong rumours that GM boss Rick Wagoner will have to resign as a result of the bail out. Chrysler’s Nardelli will probably follow.
And once we get into the New Year, and President Obama is sworn in, attention will swing over to Chrysler and how to deal with its likely demise.
A merger with GM? Chapter 11? Bankruptcy and a bit-part sell-off?
The re-modeling of the US Big 3 is a long way from the finish line.