The Auto Industry’s 15 Billion Point Turn

Below is a guest blog entry by Nomi Prins:

Perhaps jarred by the November unemployment report, Congress offered a $15 billion olive branch to the Detroit Three Friday night. (Note: You can keep calling them the Big Three if you want, but it’s a bit of a misnomer these days, isn’t it?)

The loan, stressed House Leader Nancy Pelosi (D-CA), will provide “short-term and limited assistance” to the D-3, though there is some ambiguity about what she meant. She also promised the money would be repaid “within a matter of weeks.” But given the absence of inventory movement, and lack of cash flowing through the D-3’s books, it’s not clear exactly how that’s going to happen.

Nonetheless, this loan will allegedly keep the auto industry on a ventilator until March, when the Obama administration and new Congress can take another pass at determining what to do. Until that point, the auto-execs will supposedly go about executing their multi-hundred page restructuring plans. Will they address the core problems that plague the auto industry? Let’s hope.

—Nomi Prins

Nomi Prins is a former Wall Streeter and frequent contributor to Mother Jones.


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