Life & Style | Motoring
Big 3 return to Washington
Car companies have to persuade Congress to loan them $25 billion.
- AP.
- Published: 23:25 December 2, 2008
Detroit : They'll park some corporate jets, cut executive pay and serve up concessions from the United Auto Workers, but Ford Motor Co., General Motors Corp. and perhaps Chrysler LLC also will have to address massive debts to persuade a sceptical Congress to loan them money.
As the CEOs of all three companies prepare for a return trip to Washington seeking $25 billion (Dh116.3 billion) in government loans to help them survive a worldwide econ-omic slump, their debt likely will be scrutinised as Congress decides if they can once again become viable with help from the government.
GM alone spent $847 million on debt payments in the first nine months of the year.
"There's no guarantee these guys will make it even with government help," said Republican Representative Jeb Hensarling, one of Detroit's critics who advocates letting them go into bankruptcy.
"It's also why we have bankruptcy courts, so these businesses get reorganised and the resources are used in a better way ultimately to benefit our society." Automakers argue that bankruptcy isn't an option, maintaining that no one will buy a car from a company that may not be around for the life of the vehicle. With sales at their lowest point in 25 years and no other options to borrow more cash, GM and Chrysler say government help is essential.
Cash stockpiles at GM and Chrysler are dangerously close to the minimum amount required to run the company, meaning they could have trouble paying all their bills by the end of the year.
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