Automobile misery continues in US
The possibility of the US automotive industry collapsing has re-emerged after plans to bail out the ailing sector were scuppered by the senate.
A US$14 billion ($21 billion) rescue package backed by President Bush was blocked despite both GM and Chrysler saying they will go bust in a number of weeks unless the Fed comes to their rescue.
In Australia, GM’s woes have already had an impact after the car loans arm of the company, GMAC, said that it would be pulling out of the market due to cashflow problems.
GE Finance also said it would be pulling its car loans.
According to Reuters, the White House is now mulling over using some of the money from the $700 billion bailout given to the financial sector to rescue the car industry, which was described as being on near a “precipitous collapse”.
Meanwhile, here in Australia, treasurer Wayne Swan recently announced that the government had struck a deal with the auto industry to create a $2 billion car loan pool to help dealerships extend finance to struggling motorists.