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U.S. Throws Lifeline to Detroit
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Issue
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| Contributor | Jason |
| Last Edited | Jason Dec 20, 2008 04:39pm |
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| Category | News |
| Media | Newspaper - Wall Street Journal |
| News Date | Saturday, December 20, 2008 10:00:00 PM UTC0:0 |
| Description | WASHINGTON -- The Bush administration said it would lend $17.4 billion to General Motors Corp. and Chrysler LLC, buying them a few weeks of financial relief but leaving the biggest decisions about the industry's future to President-elect Barack Obama.
Under the White House plan, the companies are required to extract enough financial concessions from workers, suppliers, dealers and other stakeholders to demonstrate their long-term viability by the end of March.
The deal's ambitious targets for the companies include replacing two-thirds of their debt with stock; using more stock instead of cash to fund retiree health-care obligations; eliminating much-criticized union "jobs banks" that pay laid-off auto workers; and establishing wage structures and workplace rules that are more competitive with foreign rivals.
But all those targets are nonbinding, and the agreement appeared to be much more porous than legislation that the administration and Democratic congressional leaders failed to pass earlier this month. |
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