Something is Just Really Screwy When the Full Faith and Credit of the U.S. Gov't is Backing Transmissions
We've all lived through way too many NPSMs (go here for NSFW explanation [especially if you work for the government]), but what the hell sort of language and outrage can match the lastest economic brain fart from the Obama crew? From government-backed T bills to government-backed Model Ts? My grandparents emigrated to America from wretched Europe for this?
The U.S. government Monday revealed the details of a highly unusual plan it hopes will ease consumer concerns about purchasing new vehicles from struggling domestic auto makers.
The plan calls for the creation of cash accounts that would equal 125% of the projected costs of paying claims related to warranties on each new vehicle sold by General Motors (GM) and Chrysler while they are in the midst of a government-led restructuring.
Auto information provider Edmunds.com estimates the reserve funds for the guarantee program would need a total of at least $1.9 billion—$1.2 billion for GM and $675 million for Chrysler. The estimates are based on GM selling 1.6 million vehicles in 2009 and Chrysler selling 900,000.
The U.S. Treasury will contribute 110% of the cash required for the accounts while the auto makers contribute the remaining 15%. Special purpose companies holding the funds would be run separately from the auto makers, allowing them " to continue paying warranty claims even if the auto manufacturer goes into bankruptcy or goes out of business."
What did you do during the government-extended business cycle downturn of 2008-????, daddy? Son, I changed timing belts under warranty for what used to be called GM.
And you thought the dealerships were ripping you off before. Just wait till the Medicare for Automobiles Act swings into high (and stripped) gear.
