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.
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