General Motors, Chrysler, and Obama's Bailout Program Essay examples

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In 2009, the Obama Administration bailed out the General Motors and Chrysler automobile companies. Having begun their decent into bankruptcy in 2008, losing thousands of jobs, sales plummeting forty percent, with a high threat of liquidation, General Motors and Chrysler finally reached government-assisted chapter 11 bankruptcy in 2009. Obama allocated eighty five billion dollars in TARP funds to the auto industry, close to fifty billion dollars of it going to General Motors. The allocated funds were successful in keeping two of the Big Three auto companies afloat, keeping taxes from sky rocketing and saving millions of jobs. In late 2008, General Motors was in financial distress due to some major financial liabilities. These included …show more content…
In the last quarter of 2008, the three companies jointly spent eighteen billion dollars of their reserve funds; this opened their eyes to the fact that their business models were not working and they needed help.
On November 19, 2008, the three companies flew their private jets to the nation’s capital for the House Financial Services Committee meeting, and asked for a twenty five billion dollar loan. The companies were chastised for asking for money when they obviously had money to spend on private jets, when they could have put that money towards their company. Representative Gary Ackerman said "There is a delicious irony in seeing private luxury jets flying into Washington, D.C., and people coming off of them with tin cups in their hand, saying that they're going to be trimming down and streamlining their businesses. It's almost like seeing a guy show up at the soup kitchen in high hat and tuxedo. It kind of makes you a little bit suspicious." Needless to say Congress denied their initial plea and they left empty-handed.
On December 2, 2008, Ford, Chrysler and General Motors returned this time driving in hybrid cars, avoiding the planes that caused so much controversy at the last meeting. The government asked them to show how the companies would survive and how they intended on paying back the money. For starters, the UAW announced that they would allow late payments to the medical funds and suspend the program that entitled

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