The U.S. Government has a $700 billion bailout pot allocated for emergency aid to the struggling automotive industry. The Treasury Department has announced that it will decide to help ailing companies on a case-to-case basis. The Treasury admits that officials overseeing the massive bailout fund have had difficulties tracking the money and assessing the effectiveness of the program.
President George W. Bush announced a $17.4 billion rescue package for hard-hit auto giants, General Motors Corp. and Chrysler LLC, which are severely in the red, and bleeding jobs. The government had already provided $5 billion in aid to GMAC Financial Services, GM’s troubled financing arm.
The bailout program will focus on providing companies with capital injections—rather than the original strategy of buying off bad assets from banks. The response to quickly changing financial market conditions should help stabilize operations for auto companies and even financial institutions hurt by the recession.
The help from the government will prevent any serious disruption to the strong>national economy and any negative effects on employment. The Treasury will factor in the importance of each institution’s economic contribution to the American strong>automotive industry. It admits that it will take time for everyone hit to recover.