The White House, President George W. Bush Click to print this document

For Immediate Release
Office of the Press Secretary
December 19, 2008

Fact Sheet: Financing Assistance to Facilitate the Restructuring of Auto Manufacturers to Attain Financial Viability
Conditioned Loans To The Domestic Auto Industry Will Enable Vital Restructuring, While Protecting The American Taxpayer

     Fact sheet President Bush Discusses Administration's Plan to Assist Automakers
     Fact sheet In Focus: Economy

Today, President Bush announced that the Treasury Department will make loans available from the Troubled Asset Relief Program (TARP) to assist the domestic auto industry in becoming financially viable. The terms and conditions of this financing will facilitate the restructuring of our domestic auto industry, prevent disorderly bankruptcies during a time of economic difficulty, and protect the taxpayer by ensuring that only financially viable firms receive assistance.

Terms And Conditions

The binding terms and conditions established by the Treasury will mirror those that were supported by a majority of both houses of Congress, including:

The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:

These terms and conditions would be non-binding in the sense that negotiations can deviate from the quantitative targets above, providing that the firm reports the reasons for these deviations and makes the business case that it will achieve long-term viability in spite of the deviations.  In addition, the firm will be required to conclude new agreements with its other major stakeholders, including dealers and suppliers, by March 31, 2009.

Effects Of A Domestic Auto Industry Failure

During this very critical time for the global economy, the impact of a disorderly bankruptcy would be very damaging to our manufacturing base, affecting jobs well beyond the auto industry.  The additional job losses and loss from Gross Domestic Product (GDP) would likely postpone our economic recovery considerably.  In addition, these effects could multiply and result in additional declines in investment, consumption, and growth, which could worsen the current recession. 

# # #

Return to this article at:

Click to print this document