Big Three to Receive $14b for Rescue Package

0 comments, 11/12/2008, by , in Auto News

The struggling Detroit automakers GM, Chrysler and Ford will receive a $14b loan as rescue package as it has been approved by the American House of President with a 231-170 vote on Wednesday.

Whether the loan will lead the big three to a lasting feasibility and competitiveness or not it was discussed by Republicans in the Senate and the House throughout the day.

Richard Shelby, a Senate Republican and the one of the top GOP member of the Banking Committee, has suspected to delay the legislation with filibuster.

Aside from many other things, according to that new bill, a ‘car czar’ would be created for the industry and it will be chosen by the white house. It will hold the big three to develop plans for long-term viability. If the companies fail to make proper progress by mid February, the car czar would ask for immediate repayment of that loan.

Under the new legislation, shareholders dividends, and executives bonuses would also be nullify.

Steny Hoyer, who is House Majority Leader, says in this connection: “It’s really a time to do something for auto industry and if we don’t do something now, may a time come that prove drastic for the US auto industry.”

On the other hand, Shelby said, “The so-called big three have become weak, competitive and innovative and this rescue would prove nothing, but sometime to delay their funeral.”

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