It is not them throwing a lifeline for three months

Ten days to provide proof of their viability in the long term. It is both unlikely and unexpected. With the increasing questions about the usefulness of a loan relay of $ 25 billion to bail out the "big three" (General Motors, Ford and Chrysler), Congress leaders decided to impose the burden of proof of "a credible restructuring plan." Them to show, until December 2, that taxpayer money can still get out of rut where seems to have plunged them the credit crisis. Talking to Washington of the "big three", but it is well known that it is mainly the fate of GM, the giant ill Detroit riddled with debt, including the CEO, Rick Wagoner, is more disputed, potentially play in the next few weeks.

"It is not them throwing a lifeline for three months." "It is to ensure their viability in the long term", explained the Democratic President of the House of representatives, Nancy Pelosi. With his colleague in the Senate, Harry Reid, it is she who sent the letter of "implementation remains" to the leaders of the "big three". To "demonstrate" their long-term financial viability, manufacturers must clearly expose "the current level of their cash, their financing needs in the short term to ensure the continuity of their operations and how they intend to meet..." "In addition, he asked them to provide their sales projections, including"in the worst scenario,"confirm that the Government will receive"warrants"in return for money from the taxpayer and to give guarantees on the limitation of the remuneration of managers and the lack of payment of dividend. The "big three" are also invited to explain how they intend to honor health coverage and payment of pensions for their employees. Finally, they must demonstrate that they are well able to meet the federal objective of a decline of 40 of energy consumption of here 2020, in the passage to the construction of clean vehicles.

Emergency plan

If all these conditions are met and after consideration of a "credible restructuring plan" by the commission of finance, the Fed and the Court of Auditors American (Government Accountability Office), the Congress would be willing to meet in special session, from 8 December, to discuss an emergency plan. But even in this hypothesis, it is not certain that it approve the loan relay 25 billion before January, given the opposition of the Bush administration to any use of the reserved to banks and financial institutions $ 700 billion bank. Despite the cry of alarm from Rick Wagoner, who brandished the "devastating effect" of a possible bankruptcy of the "big three" on the American economy (with 2.5 to 2.9 million direct and indirect jobs threatened), the idea of a restructuring of GM proceedings of Chapter 11 bankruptcy has many supporters, particularly in Republican circles. For the current Secretary of Commerce, Carlos Gutierrez, the only possible bipartisan agreement can be on an expansion and acceleration of the program of 25 billion dollars in aid to convert vehicles to low consumption of fuel, already approved in September. For its part, the new Barack Obama team would favour assistance emergency, but in exchange for a profound restructuring of the sector.

In this context of uncertainty, GM announced Friday that he would even slow its production in five plants of North America and close its plant pick-up of Oshawa, in Canada, a month and a half earlier than expected. In contrast, the second global constructor has excluded the sale of its Opel subsidiary, seeking her side of the urgent financial guarantees to the German Government.