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Detroit Didn't Pad It's Bill to $34 billion

Posted by: David Kiley on December 4, 2008

More Truth Squad Reporting: In the last 24 hours, TV and radio and even some newspaper columnists who should know better have reported that the Big Three automakers have increased their request of government loans from $25 billion last month to $34 billion.

Not so.

$25 billion was a figure put on the table by Congress, not the automakers themselves. It is an amount that was already targeted to automakers in the 2007 energy bill to help them re-tool factories to build more fuel efficient vehicles. On the table has been the acceleration of those funds to help the automakers survive the Recession.

The automakers were each asked how much of that fund they would need. Lawmakers complained to automakers that they didn’t think it was enough. Now, they are back with a figure of $34 billion.

Some of the mis-reporting: NPR today as well as WSJ columnist Paul Ingrassia who writes today: “Consider GM, which appears to be in the most immediate danger, and sits “at the epicenter of the auto industry’s crisis,” in the words of respected Deutsche Bank analyst Rod Lache. General Motors seeks a total of up to $18 billion (including the $4 billion mentioned above), which is a hefty $6 billion more than it had requested just weeks ago.”

His words may be technically correct, but the context is missing. GM had been asking for $12 billion last month as a portion of the total they were told was available by Congress if all they got was the energy bill money.

Reader Comments

Paul (Vw)

December 4, 2008 11:56 AM

Whether or not one interprets this as "padding" or not, it pales in comparison to the scale of the Detroit mess itself.

If Washington errs by bailing out Detroit (whether $25 billion or $34 billion or the inevitable $10's of billons additionally), soon the only difference between Detroit and VEB Sachsenring is that Detroit's cars are probably better quality...for now.

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