Thursday, January 26, 2012

Bush Administration Memo Says They Almost Pushed Chrysler and GM into Early Bankruptcy

Back in 2008, the economy took what can only be called a nosedive. So much so, that the U.S. auto industry nearly ceased to exist. Based on that catastrophe, one of the last things that President Bush did before he left office was to give General Motors and Chrysler a combined $17.4 billion to keep them afloat.

The money did the trick, allowing the auto automakers to keep their doors open for a few more months. But the Detroit News reports that the Bush administration almost took a different road. Published by The New Yorker, there was a 57-page economic memo written by Larry Summers (economist) for President Elect Obama. The memo mentioned that President Bush was actually working on an earlier bankruptcy for the automakers, with a monetary backing of up to $100 billion in government financing.

Bush (pictured with Chrysler CEO Bob Nardelli) had effectively prolonged the inevitable in giving Chrysler and GM the bridge loans, and pushed the more difficult decision on to the Obama administration. However, Mr. Summers seemingly had the opinion that pushing the automakers into a bankruptcy too soon would more than likely have caused severe damage not only to those two automakers, but the entire auto industry as well.

Read the rest of the article at Automotive Discovery

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