Big Three bailout may be around corner

Automakers seek $50 billion in low-interest loans to convert plants from trucks to fuel efficient cars; presidential election could help their chances.

NEW YORK (CNNMoney.com) — Plunging auto sales, high gas prices and election year politics could help convince Congress to approve a $50 billion loan package to embattled U.S. automakers that Detroit’s Big Three claim is key to their future success.

On Wednesday, General Motors, Ford Motor and Chrysler LLC reported monthly sales declines of at least 20% from a year ago, as American car buyers continued to turn away from SUVs and pickups and towards more fuel efficient car models.


The Big Three are now in the process of closing truck assembly lines and rushing to catch up with hybrid and other fuel efficient offerings from Toyota Motor and Honda Motor.

But with GM and Ford saddled with junk bond debt ratings and privately-held Chrysler with the thinnest capital cushion of the three, Detroit is caught in a credit squeeze that will make such investment difficult if not impossible.

CNN