Hey, America: It's a Loan

[1gobluedem]

Hey, America: Detroit's automakers are asking for a loan

DECEMBER 3, 2008


Can we get something straight between Detroit and the rest of America?

What the auto industry is seeking in Washington is a loan, L-O-A-N, as in something you borrow and then pay back -- with interest.
This is not a gift, a grant or a handout. It's a loan, the kind of thing financial institutions used to do before they all had to scurry to Washington for their own bailouts, which have been far bigger and subjected to considerably less scrutiny than this loan that the auto industry desperately needs to keep operating -- and keep millions of people employed.

http://www.freep.com/article/20081203/OPINION01/812030323

[yodoobo]

1. You get a loan at a bank

If you have to go congress to get that "loan" is a bailout.

BAILOUT

[w4rma]

2. Will the financial industry be paying back their bailout as one would payback a loan? (nt)

[1gobluedem]

3. It was a loan when Chrysler went to Congress

And it was paid back early to the benefit of American taxpayers.

What are the financial institutions planning to pay back? Oh, right. Nothing.

If you borrow from your friend or your employer and pay it back, it is a loan or a handout? I've borrowed from friends and family in the past and paid them back. They were loans. Not bank loans, just loans.

[yodoobo]

4. The bank got a bailout to. So did Chyslyer

Nothing wrong with the the term. Its accurate.

[sarcasmo]

16. Chrysler under Iacocca paid that loan back with interest. Do your research.

[marketcrazy1]

6. give them the money

GM will most likely fail in the next 24 months if they get this "loan" however what car companies are asking for is small potatoes compared with the "non recourse" loans,bailouts and buy ins we have given to banks and financial services companies!!, THESE "loans" will help for a short time and right now ANY help is good, so give them the money! ( I am against these bailouts ) but all things considered another 100 billion ( the ultimate cost through 09 ) is a small price to pay to boost public confidence...

[islandmkl]

5. check out michael moore's take...

http://www.dailykos.com/storyonly/2008/12/3/74954/1532/390/668798

and some pertinent discussion:
http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4578299

[ShortnFiery]

7. Sort of like the $1500 dollars I LOANED to my brother in 1998?

We are still estranged because THE JERK won't even admit that I wired him the money.

I want STRINGS ATTACHED and in legalese writing ... so the Auto Industry can't "take the money and run" like the Banks (and my brother). ;)

[sarcasmo]

17. I find it sad that you aren't talking to your brother over a small sum of money.

My BIL is treating his teenage son this way over the same amount that was used to purchase a car. If you brother died today, how would you feel?

[ixion]

8. so, tell me... how does an insolvent company get a loan?

that's a massive credit risk, and the same folks who are now looking for said 'loan' would either deny a person such a loan, or charge them 30% interest for making the loan.

Okay, so it's a loan. So what are the TERMS?

The devil is in the details, as the saying goes.

[1gobluedem]

10. Congress is holding the auto companies to much higher standards than the financial institutions

What plans were they required to submit? Oh, right again. None.

The auto companies asked for a bailout or loan or whatever you want to call it and were scolded, berated, chastised and sent home to devise a clear plan for the money. They have and are currently presenting it. There are plenty of strings attached.

The financial instituions had hundreds of billions thrown at them with no strings attached.

[ixion]

12. it takes far more than 'plans' to get a loan from a bank

so I would beg to differ with your premise, that these insolvent companies are somehow being held to a higher standard.

A business plan is requisite for any secured load. Collateral and a solid balance sheet are also requisite. Unsecured loans are available, but at 30% interest.

As of right now, I see no string attached. And in any case, there was supposed to be strings attached to the 1 trillion we just gave the banks, and that has amounted to zero oversight. Zip. Zilch. Nada.

Sorry, I remain unconvinced and unimpressed with the proposition of loaning 25 billion to an insolvent corporation.

[yodoobo]

15. They are being held to a far far lower standard

The very fact that no bank, anywhere in the world is willing to loan them a nickle is proof that they fail to meet any banking standard of ability to repay.

No, the reason that they are begging congress for money, is because the standards for enticing Congress to give them our money is laughably low.

Bailout angles "how they intend to use the money".

Lenders ask "how do they intend to repay it"

Its a bailout.

Thats ok though. If the Bailout will improve our country and make the lives of citizens better, then do it. But don't pretend its anything but a bailout.

[suston96]

9. Chrysler's "loan" was a "loan GUARANTEE" and not a direct loan from the government......

http://news.yahoo.com/s/ap/20081123/ap_on_go_co/auto_bailout_shades_of_chrysler

And Chrysler paid back the "loan" early and the US Treasury and lenders earned some 335 million in interest.

[marketcrazy1]

11. PRIOR PERFOMANCE

IS NO GUARANTY OF FUTURE RESULTS! auto industry sales projections for 2009 are wildly optimistic and even the rosiest scenario leaves GM in a bind! any "loan" to GM will never be repaid (IMO) even if the company manages to survive long enough to be sold! the loan would be forgiven to entice a buyer.. read Fords proposal they lay out three scenarios for sales going forward, in my view #3 is most likely and if it came to that GM would fail!!

[suston96]

14. When I read shutdowns I read job losses - when I read job losses........

....I read loss of revenue to both workers and to the government in taxes and into the SS and Medicare Trust Funds.

Funds that will be needed as the baby boomers retire in growing numbers. I see tangential benefits to the government keeping the auto manufacturers, and a number of other big employers running and solvent.

It's about jobs - not profits to stockholders.

[tomreedtoon]

13. Hey, America, they are SLUGS!

You don't give an addict or a boozehound money with their vague promise that they will buy milk for their children. That's what this is.

The automobile INDUSTRY should be saved. The automobile MANAGEMENT must be fired. Yes, I'm talking nationalization. There are so many insane factors about these companies that I will only take time to bring up one. Why do they have duplicate lines of cars that are essentially the same car, but branded with different names? (For example, why did Michael Moore's Anti-Christler car have a Mercedes-Benz body? Why didn't they call it a Merceces-Benz and drop the failing Anti-Christler name?)

Sure, the government could mismanage the car companies. But I'll bet they wouldn't do as bad as the insular, drunken idiots that are doing it now. We're getting rid of George Bush to save the country. Why not get rid of Bush's equivalents in the industrial sector?