Will US Congress bailout GM, Chrysler, Ford?

The CEOs of the big three––General Motors, Chrysler, and Ford––are being grilled at Capitol Hill and this is their ultimate test of their persuasion skill. They are asking for USD 34 billion.  

Here is a transcript of Sumantra Barooah’s comments on CNBC-TV18. Also watch the accompanying video.

It has been two gruelling days, today being the final day, of the ultimate test of the persuasion skills of the chiefs of the big three. USD 34 billion is what they are asking for and at this point looks like perhaps they may be able to get that bailout money.

If one goes by the comments made by the executives of firms like JP Morgan and JD Power, they said that they will get the money but with strings attached and that they should bailed out because there will be a huge ripple effect in case General Motors (GM) and Chrysler or GM and Chrysler and Ford go bankrupt. No less than 3 million jobs are directly or indirectly are at stake; not to mention the fate of the suppliers––the tier I and tier II suppliers are also hanging in a very crucial way.

Here is what the three chiefs are asking for. GM is asking for USD 12 billion, USD 4 billion of which they want as early as in the next two weeks and Chrysler is asking for USD 7 billion and Ford is not directly asking for money but it says it should be given access to credit worth USD 9 billion if at all they want it.

Among all these three, it looks like Ford is in a little relatively better position but in a way it is also slightly ironical that for GM especially when all this is happening in its centenary year and if the bailout package is not given to them, it will be the end of GM and they will have to file for bankruptcy.