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US carmakers to get government bailout money

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US carmakers to get government bailout money

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As the Los Angeles Car Show opened, members of the US Senate reached agreement on a bipartisan aid deal for the “Big Three” American manufacturers. General Motors, Ford and Chrysler had been pushing for a 20 billion euro bailout from the government to avert possible bankruptcy.

Even so the mood in LA is sombre. Dan Bonawitz, of Honda US said: “We are in the midst of a very challenging period in the history of our industry and the events of recent months have proven that none of us is immune to the impacts from a contracting economy, stalled credit market and collapsing consumer confidence.”

In October, compared with the same month last year, GM sold 20.6 percent fewer vehicles, Ford’s sales were down 18.3 percent and Chrysler’s 26 percent. Overall in the US, sales in October were down almost a third to their lowest in more than a quarter of a century.

General Motors and Chrysler have a very low key presence at the LA show, instead sending their top bosses to Washington to plead for bailout billions to avoid bankruptcy. If the plan had not been agreed this week, they would have had to wait until the new administration takes over in January. In response to the package the carmakers shares shot up.