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.
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