WASHINGTON (Dec. 19, 2008) — The White House on Friday unveiled a $17.4 billion rescue package for the troubled Detroit auto makers that avoids bankruptcy, the Wall Street Journal and Associated Press reported.
"Allowing the auto companies to collapse is not a responsible course of action," President George Bush said.
Speaking from the White House, he said that a bankruptcy was unlikely to work for the auto industry at this time and would deal "an unacceptably painful blow to hard-working Americans" across the economy.
The deal would extend $13.4 billion in loans to General Motors Corp. and Chrysler L.L.C. in December and January, with another $4 billion likely available in February. The deal is contingent on the companies´ showing that they are financially viable by March.
The deal generally tracks key provisions of the bailout legislation that nearly passed Congress earlier this month. But it is somewhat more lenient in judging their viability.
The deal appeared to represent a relatively modest step in the administration´s efforts to put the auto makers on a long-term path to viability. By forsaking a trip to bankruptcy court, the White House gave up its most powerful weapon to extract concessions from the companies and their workers, suppliers, dealers and creditors.