Automakers Look to Bush to Fend Off Bankruptcy

Bankruptcy imminent for GM, Chrysler not far behind
By Clay Dillow,  Newser Staff
Posted Dec 12, 2008 7:51 AM CST
Sen. Christopher Dodd, D-Conn., left, talks to Sen. Carl Levin, D-Mich., following the Senate's rejection of an emergency $14 billion loan bailout for US auto companies.   (AP Photo/Haraz N. Ghanbari)
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(Newser) – What now for GM and Chrysler? Unless the White House comes up with emergency aid, General Motors could be in bankruptcy within weeks, with Chrysler close behind, Bloomberg reports. GM, in fact, has hired a team of top legal experts to explore that option, which would be one of the largest such filings in history, the Wall Street Journal notes. If either fails, it could trigger job losses of up to 3.5 million, says one study.

President Bush must now let the companies fail or engineer his own rescue, either from the Treasury’s bailout funds or through Federal Reserve credit. All but $20 billion of the original $350 billion approved for the bailout has already been committed, and the Fed is reluctant to throw federal money where Congress would not. GM shares plunged nearly 40% in early trading.