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White House Approves Automaker Bridge Loans

Dec 31, 2008

On Friday, December 19, 2008, President Bush announced a $17.4 billion package to provide bridge loans to General Motors and Chrysler from the Troubled Asset Relief Fund (TARF). Both companies will be required to submit restructuring plans to the White House, including conditions that were part of the legislation negotiated between the White House and Congressional Democrats. The automakers have a March 31, 2009 deadline to provide proof of their financial viability, or they must immediately pay back the government loans and file for Chapter 11 bankruptcy. While the plans do not preempt State franchise laws or mandate trimming of dealer networks, many in the media and on Capitol Hill have called on troubled automakers to make dealer cuts. NJ CAR has worked closely with the New Jersey Congressional Delegation and the NADA to educate members of Congress and the media on the value of the dealer and the role of State franchise laws in maintaining a competitive marketplace.