Bankruptcy Funding Solicited for Car Makers

Bankruptcy Funding Solicited for Car Makers

online.wsj.com

"Everything is on the table right now," one person involved in the matter said, adding that President Barack Obama doesn't want to see more massive job losses in the auto industry. His administration also doesn't want to anger the United Auto Workers by appearing to push for bankruptcy, this person added.

The initial discussions call for private banks to provide the financing -- known as a debtor-in-possession, or DIP, loan -- with the government guaranteeing or backstopping the loan. In this scenario, some of the financing would be used to pay back the $17.4 billion the government lent GM and Chrysler late last year.

Treasury advisers are handling the effort and keeping GM and Chrysler informed of the steps through back-door channels, said the people familiar with the matter. The interplay between the government, auto makers and the markets is proving to be complicated.

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the road to bankrupcy has in my opinion green light already. they are surely trying to give some time for all of those board members to clean their desks so noone will get hurt from the "family".

the both car producers are without any doubt not going to receive as much as they need to survive. but let's wait and see.

as is stated in the article ("Mr. Wagoner, the GM CEO, said the bankruptcy scenarios are "risky" and "costly," and would only be pursued as a last resort.") it is risky. it is risky for them to not go down together with the workers and that is all they will concentrate now. to save their butts.

online.wsj.com
(visit the link for the full news article)