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Monday, December 8, 2008

$15 Billion Auto Bail Out

Per Bloomberg:

Lawmakers are putting together a $15 billion plan intended to help keep GM and Chrysler afloat and negotiations are underway between congressional Democrats and the Bush administration over what conditions for restructuring will be required. The House and Senate are returning this week specifically to consider the measure.
It is still up in the air as to whether the votes will be there when the legislation is finished. What is known is that the size of the bailout (currently $15 billion) is larger than the equity value of the three firms (market cap for GM and Ford below, Chrysler in privately held) and that the $15 Billion is a drop in the bucket as to what these firms need to survive.