$14 Billion US bail out rejected
Last week top car companies MG and Chrysler went out to seek government help as the two giant car companies were facing bankruptcy with such a massive loss in sales. it’s said that MG alone were spending up to $2 billion a month, with out making enough to pay back what they were spending. The two large companies went in for a life line when they approached top US Senate to help them through this massive global down turn. With such high intent to receive government money for the survival of the companies, with top chiefs of the two saying that they would only take a annual salary of $1, as a good will gesture to help keep the two companies a float.
Top economist in the US had said to say that ‘this would only keep the companies running for a few months, and that the long term effect would take it’s course in due time, with bankruptcy inevitable.’
The figure that these two car companies had in mind was in the region of $14 billion, and more if it comes to it. Yet today is has been reported that US Senate has denied this money to be released. Talks were made by democratic leaders and republicans, many Democrats backed the bail out but they could not get enough Republicans behind it.
Both Bush and recently elected Obama backed the bill, as they say that if this industry was to fall, over 3 million US jobs would be lost, and many more in factories around the world. Originally Ford was also in the line up to receive a backed loan, in case of emergencies and the original bail out figure stood at $34 billion. So Ford had to back down as that original amount would not have been met, and it would be in the interest of Ford to leave MG and Chrysler to lead the way in asking for this money. Both companies now look set to fall. If things carry on the way they are in the car industry, car giants Ford would also follow suit in to bankruptcy.
