Chrysler Asking For Additional Bailout Money
They’re asking for more bailout money, on top of the TARP money they received last month, and their financing arm is in talks with the Treasury for a cash infusion also. The reason? The pesky consumer, already saddled with ridiculous amounts of debt and saving virtually no money, doesn’t qualify for any more debt, to buy cars that allegedly, nobody wants to buy:
Consumers have largely stopped shopping for cars and trucks as credit markets tightened and many could no longer qualify for loans.
Chrysler said last month that 20 percent to 25 percent of its customers couldn’t get credit to buy new vehicles, which was one reason the automaker’s sales plunged 53 percent in December, the highest of any automaker.
The Bush administration is working to complete action on financing help for Chrysler Financial LLC before it leaves office on Jan. 20. A government official involved in the talks said it would be less than the $6 billion package GMAC LLC received.
“We’re very hopeful that (with) continued support from the Treasury and access to the TARP funds for Chrysler Financial that we’ll be able to provide additional retail support,” Nardelli said. “Our hope is we would get that resolved within a week or so.”
Chrysler Financial’s request is separate from Chrysler’s request for $3 billion, Chrysler spokeswoman Shawn Morgan said.
Nardelli declined to say how much Chrysler Financial was seeking but said he hoped “it would provide the kind of support for us in a similar fashion that GMAC was able to provide to GM.”
After receiving its TARP money, GMAC announced new financing deals for customers and dropped its credit requirement for loans from a score of 700 to 621.
GM’s financing arm, GMAC received a New Year’s Eve infusion which allowed the company to lower its lending standards which effectively allowed even more deadbeats to take on even more debt, so that GM could sell more cars.
So let’s get this straight. The American people are in financial trouble, we’re told. We don’t have money to pay for health-care, our homes are in foreclosure, we’re at risk of losing our jobs, etc. Meanwhile, the federal government, already in massive debt, has decided to use taxpayer money (or print more money) to provide equity and/or loan that money to entities which are on the verge of bankruptcy, so they can sell more cars/make more loans, to Americans who already are on the verge of bankruptcy themselves.
This is the problem with government and those who support government intervention and solutions to economic problems. Government is inefficient and inept. Using other people’s money to support bureaucracies which are intended to help its citizens always welcomes waste and excess. In addition, once the government till is opened, once government sets the precedent that money is available to all who “need it”, and the government provides the means by which to get it, it’s only a matter of time before the dam breaks. This is what we’re seeing here. Other industries will line up for a handout, and as we’re seeing, the same industries will come back for more, and the spigot will get harder and harder to shut off. If we want an end to our economic and financial problems, certain attitudes and behaviors have to change and bailout nation must end. What we’re seeing with the auto-industry is just more of the same.
(UPDATE)
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