facebook
twitter
rss
account
search
search
 

Early thoughts on auto bailout revealed

Jan. 24, 2012 at 5:53 PM   |   Comments

WASHINGTON, Jan. 24 (UPI) -- White House economic adviser Lawrence Summers warned not to push U.S. auto companies into bankruptcy too quickly, a recently surfaced document says.

A document prepared for President-elect Barack Obama in December 2008 warned that options of an early bankruptcy filing for General Motors and Chrysler considered by the George W. Bush administration could result "in potentially severe disruption to the entire industry."

"With a couple of weeks planning, they could achieve an orderly filing," Summers wrote in a 57- page document that reveals some of the Bush administration's early thinking on the issue of bailing out the two companies.

The Detroit News reported Tuesday that Bush estimated the cost of bailing out the automobile companies would cost "$100 billion of debtor-in-possession financing."

Summers, who served as co-chairman of the White House Automobile Industry Task Force, wrote that "We believe that number may be inflated."

It turns out, the number was inflated. It cost $85 billion in various loans to Chrysler and GM to see them through their bankruptcies.

The Treasury Department estimates that taxpayers will lose $23.6 billion on the loans.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
Recommended UPI Stories
Featured UPI Collection
trending
Celebrity Couples of 2014 [PHOTOS]

Celebrity Couples of 2014 [PHOTOS]

Most Popular
1
Northrop Grumman developing reusable space plane for lifting spacecraft into orbit
2
Embraer refining KC-390 transport
3
Navy to test Lockheed Martin's FORTIS exoskeleton
4
Slovakia plants seed in Ukrainian gas sector
5
Final builder sea trials for Australian landing helicopter dock ship
Trending News
Video
x
Feedback