US automakers get a second chance, but must come up with a plan to save their industry. Congress is expecting detailed restructuring plans from all 3 Detroit automakers by December before it decides on providing a 25 billion dollar bailout.
Congress is standing there, arms crossed, tapping its foot with an expectant and demanding look on its face.
US automakers were given a second chance at survival last week when Congress delayed a vote on a 25 billion dollar bailout for the industry until December and demanded to see detailed restructuring plans from the Big 3 before putting the matter to a vote.
Congress has set a deadline of December 2nd for submittal of the plans and will hold further Congressional hearings that week to weigh the automakers' proposals.
Congress is expecting lots of details. It is demanding a 12 page summary of their restructuring plans, that is to be made public, as well as a document of roughly 100 pages detailing the entire plan. This document will include aspects of their business that are to remain confidential but must outline how each of the automakers will use its share of the bailout and set itself back on the path to profitability.
The Detroit 3, Ford, GM and Chrysler, burned through almost 18 billion in cash just in the third quarter of this year. GM and Chrysler are in dire need of operating capital in order to continue functioning.
Ford is in somewhat better shape financially. But all 3 automakers face a gloomy 2009 with sales falling off sharply. October sales for GM were down 45 percent compared to the same period last year.