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December 20, 2008

Auto Bailout Term Sheets

This is some pretty interesting stuff.  The Term Sheet - 14 pages and an appendix - for the $13 billion loan to GM and the $4 billion to Chrysler can be accessed here.  They have to give up the private airplanes, reduce and limit salaries to the top 25 executives, and a lot of other stuff, i.e. like not sell anything for more than $100 million without prior notice to the government.  What I like especially is that they have to provide weekly "status reports" to the "lender," i.e., the US Treasury, and bi-weekly "liquidity status reports," and two monthly "certifications."  I assume that the additional cost to do those reports will eat up the saving on the airplanes and salaries.  Also we will need a whole new bureaucracy to read all these reports and write memos to each other about what they say.  I may be getting a little crusty with age - I know.   

December 20, 2008 in Current Affairs | Permalink

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