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Auto Bailout Agreement Reached, Language Still Being Worked Out

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December 09, 2008 10:29 PM

ABC News' Jon Karl and Z. Byron Wolf Report: The exact language in the bill is still being tweaked, but an agreement between Congressional Democrats and the White House on a bailout for the big three Detroit automakers has been reached, sources tell ABC News.

"There is agreement in concept and language is being exchanged back and forth to capture that agreement," a senior Bush administration official tells ABC News.

The most important part of the agreement, sources say, is the idea that after the U.S. automakers receive financial rescue they must prove to the government that they are viable. If after a certain time period the U.S. automakers are not found to be viable then "the loan shall be called back to the government."

Sources say the agreement that has been reached would call for the creation of a car czar, someone who would be empowered to force the companies into Chapter 11 bankruptcy reorganization if they do not agree to a plan for long-term viability by March 31. The car czar would negotiate with auto companies, unions, creditors and suppliers a plan for long-term viability.

On March 31 or after an optional 30-day grace period, the automakers  would have to show that they have a "positive net value," and prove an ability to pay back the government loan.

The leading Republican in the Senate, Mitch McConnell of Kentucky tonight said the agreement may in the end not mean all that much because he is not sure if enough Republicans will support the deal. In fact, McConnell told ABC News that he is still undecided.

December 9, 2008 | Permalink | User Comments (29)

User Comments

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Boycott the big 3 so Washington will hear us that we do NOT want bailouts for anyone!

Posted by: No Bailout | Dec 9, 2008 11:15:42 PM

Boycott the big 3 so Washington will hear us that we do NOT want a bailout for anyone!

Posted by: No Bailout | Dec 9, 2008 11:19:07 PM

Tax payers "LOAN" you money.."NO" bonus for any body until tax payers paid back.Have your big Christmas party at your own expense.

Posted by: orangecat | Dec 9, 2008 11:23:51 PM

hmm, wonder if heckava job brownie needs work? just what the auto industry needs. oversight from the government who is in worse shape than the big 3.

way to go congress!!

Posted by: gypsytoo | Dec 9, 2008 11:31:06 PM

Wemust allhelp our automakers. After all, Americas caused,in large part, their problem. To thosewho bought the foreign cars...you must take the blame... you are responsible... My father went to war agaisnt these counties that you now buy their products. To quote.. every American can have one foreigncar in their liftime... a quote from my father. Another, whent he economy is bad we must all helpby making a major purchase - one within our means of course. He meant Americanroducts and not foreign We all need to learn more and evaluate our purchases better and maximizethe monies spent so they remain in the US.

We The People.....needto spuron our own recovery.

We The People...are also awatethat our congress put us into the opportunity tocause this crisis and both our congressional leadership and our represented public are to blame. There is plenty of blame and it does not fall just onthe shoulders of Detriot. It falls on the shoulders of each and every individual making purchases that simply sent our monies oversees. The purchaser was in cntrol ofwhere they monies went the entire time...

We The People.

Posted by: BDC | Dec 9, 2008 11:31:46 PM

"To thosewho bought the foreign cars...you must take the blame... you are responsible..."

Yeah, they're responsible for the crappy quality and insane wages for workers. Incidentally, many of those "foreign" cars are manufactured in the United States.

"To quote.. every American can have one foreigncar in their liftime"

They can have as many foreign cars as they wish/can afford. This is a free nation with a free market.

I take it BDC here isn't a member of Mensa.

Posted by: Benson | Dec 9, 2008 11:54:11 PM

It didnt work for the mortgage issue, and it will not work for the auto industry. This is not a socialist society.

Posted by: Anon | Dec 9, 2008 11:54:49 PM

My next car will be a Ford, provided they don't accept a dime from this payoff to the unions for their support of the Democratic machine, even if they did leave Blago hungry for more.

Posted by: jon | Dec 9, 2008 11:59:26 PM

Well, that does it for me. I own a Chrysler right now, but if this deal goes through, I think its enough to make me buy Toyota or Honda in the future. I refuse to support companies who can't get their act together, and instead go begging hat-n-hand from the taxpayer.

If these companies truly acted in the spirit of America, they wouldn't take any tax payer dollars, and instead cleanup their own mess.

Posted by: Kris | Dec 10, 2008 12:11:22 AM

I don't understand these companies anymore. They provide services and a product that they deem to be good enough for us and then complain when they start losing money. I guess they figure they can just parachute out if the going gets rough and too bad for everybody that depends on them for jobs, not to mention the other companies and their people that supply and contract with them.

But, I don't think the State should control a market and manufacturing. Didn't work in Russia nor China. They went the other way-towards free market enterprise and are a heck of a lot wealthier now.

Those early Datsun pickup trucks sold (not that many actually) over here for example...they were laughable. But they learned, they adapted and they overcame. So, why can't American companies do that?

Posted by: Grand Old Party | Dec 10, 2008 12:37:40 AM

Tom,

wanna tell us where you work - so that all auto workers on this site can decide whether to patronize your place of business?

let the big three go under and see if you still have a job - or are you isolated from the Michigan economy. i doubt it.

such anger and hatred. my my

Posted by: gypsytoo | Dec 10, 2008 12:44:59 AM


I will echo Jon from above.


I have taken delivery of 4 new Big 3 vehicles in the last 8 years......2 Ford and 2 Chrysler.


I will not, WILL NOT, buy another one from any company on corporate welfare and nationaliztion. Toyota, Nissan, Suzuki, here I come because I can look them straight in the face and not feel like I getting screwed-over by a charity-case.


The auto industry will be alive in this country but it won't be from the UAW/Big-3 mess of today. It will thrive from other makers and from other ways and I will support it from this day forward.

Posted by: JoeinTX | Dec 10, 2008 12:49:44 AM

I own BMW, Lexus and Toyota. All were built in North America. They are all much better than any Big 3 equivalent on the market. I say let them go under if they can't build a comparable product.

Posted by: prototype | Dec 10, 2008 2:19:35 AM

Here's how it works.
Every day that one of the Big 3 is in business, they're essentially asking me for a handout.
"Please buy our product".

If I didn't buy one before, what makes the government think I want to just send them the money for one now?
And I wouldn't even be getting the car this time around.

Pathetic.
No bail out!

Posted by: Rob K.; | Dec 10, 2008 2:29:31 AM

I would rather an employer of so many americans, and others dependent on the auto makers for their business get help.

To keep people in America Working.


Where the banks and the Brokers they bailed out are mostly international companies. With the money flowing to others in foreign lands, Not kept in America at all. With the exception of two of them.


If you are going to boycott anyone let it be AIG, Citi bank and the wall street brokers. They are investing the money they received over seas.


Do demand the auto makers to keep Americans working, make more american jobs.

Posted by: seah | Dec 10, 2008 6:07:16 AM

Democrats and republicans can agree on this:
NO MORE BAILOUTS!!!!!!!!!!!!!!!!!

Restructure under chapter 11 like EVERY OTHER COMPANY WHICH FAILS. Kick out the unions. Whatever you do, do NOT pass card chack....but that's off topic...

It is the government stranglehold which has kept these three non competative in the first place...not foreign cars! We have every right to select the car we see fit to drive if we have the ability to pay for it. Free market, free people.

It is HIGH TIME we remember what economic system we thrived under and kick out PELOSI/FRANK/REID/BUSH/and soon to be big spender OBAMA and return to sanity. No more stimulus...no more bailouts...no more sob stories...no more 30 minute infomercials...no more emotional manipulation to garner support for more soft socialism. WE THE PEOPLE say no more. Close our borders, reward those who work hard, punish those who break the law, uphold the constitution and protect the innocent and the homeland from Islamic jihadists and other threats abroad. DO WHAT YOU ARE SUPPOSED TO DO and STOP messing with our markets as if you had a clue about anything you are doing.

Good GRIEF. I hope that the republicans "obstruct" this.

Posted by: Diane | Dec 10, 2008 6:13:44 AM

For God's sake and the country's DON'T DO IT!

Just say NO FREAKIN' WAY.

I will NEVER buy a Crappy-3 product if the government bails them out.

Next, we'll hear the government and the states are required to buy from the Crappy-3 to keep them going.

It's not all the UAW's fault - management has signed those contracts over the years - but those costs are most of the problem, whether directly as wages, or indirectly in benefits for current workers, retirees, laid off employees or in the inefficient work rules that always come with unions.

CHAPTER 11 for the Crappy-3! And if they don't like Chapter 11, convert it to a Chapter 7 and liquidate the assets!

Posted by: Cato | Dec 10, 2008 7:40:56 AM

How do they pay it back in three months if they aren't viable? Won't they have spent it all trying to become viable?

Posted by: ctmom | Dec 10, 2008 7:46:29 AM

filibuster this thing mitch! let these companies go bankrupt. then the odious union contracts can be set aside and the assets used by a more efficient company. next we need to break the legs of federal government by getting rid of CAFE standards, etc. let the car companies get back to producing vehicles the public actually want to buy.

Posted by: nick danger | Dec 10, 2008 10:08:37 AM

I will never buy a GM or Chrysler again.

Posted by: JJ JONES | Dec 10, 2008 10:42:38 AM

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