The agreement containing all the key elements of the bail-out package was concluded on December 9. Only clearing some minor details and wording the contracts is yet to be done. According to the arrangement George Bush will appoint an executive officer to supervise the use of the loans and the restructuring of the car industry. As a condition of the package the Detroit three is expected to focus on the quick reorganization of their operations, otherwise the loans can be withdrawn.
The three car companies are very close to bankruptcy as both the financial crisis and the economic recession hit them hard. The bail-out package can lift the stress for a short period but the USD 150 million is barely half of what the Detroit three had asked for. General Motors, Chrysler and Ford are seeking altogether USD 34 billion in loans; Ford says it doesn’t need short-term financing but is seeking a long-term line of credit. GM and Chrysler say they need financing before the end of the year or risk downfall.
Congresswoman Nancy Pelosi had originally suggested providing the emergency aid to the car companies from the USD 700 billion bank aid package, but the White House point-blank refused it. It is now the USD 250 million package allocated to the development of energy efficient vehicles that is used for the rescuing of the Detroit three.
Vocabulary:
- agreement in principle – elvi megállapodás
- rescue package – mentőcsomag
- bail-out package – kisegítő csomag
- to appoint – kijelöl
- to restructure – átalakít
- reorganization – újjászervezés
- bankruptcy – csőd
- economic recession – gazdasági visszaesés
- short-tem financing – rövid távú finanszírozás
- energy-efficient – energiahatékony/energiatakarékos
