The $25 billion is referred to as a "bridge" loan. It's purpose will be to support cash flow until auto sales turn around. That's the short answer.
The insurance companies which insure the CEO's, and other high-ranking executives for the Big Three often require that they fly privately. Security reasons are often the most cited. They do not fly alone on those jets. They have staff which accompany them, and their transportation costs have to be considered, also. These jets do not have luxury amenities, contrary to what most folks think. Neither are they Spartan. They are flying offices. When a corporate officer flies from Detroit to LA, for example, they get in about six hours more work than when flying commercial. No killing time in boarding lines. No waiting for limos or taxis.
Most of you forget just how much these guys work. They're "married" to the companies for which they work. The eleventh floor at Ford WHQ is lit long after the bottom ten are darkened. Twelve-to-fifteen hours are the norm, not the exception. On the weekends, while we're at the gun clubs, they're working at home, or the office, and their staffs do the same.
These guys got to the top because they are masters at organizing themselves, their work, and their organizations.
The questions you should be asking is, "What those socialists/collectivists in Congress are doing to cut waste and spending in government?"
I'm no fan of the the UAW and its "jobs bank". However, those folks collect a percentage of pay IN LIEU, of state-paid unemployment. The Big Three are self-insured, when it comes to unemployment. They don't pay a separate insurance company. They often work at charities during the day. Yes, the Big Three also donate thousands of labor hours to local charities. There are some anecdotal stories about watching TV all day long, but that's true with even the Teamsters and steel workers unions. So don't bash only the UAW.
RICO46 - Nobody at the Big Three retires after 20 years of service. You must be thinking of the fat
[email protected]@rds who have municipal and state jobs.
Here's a basic lesson in how profits are applied -
The "transplant" companies, Toyota, Honda, Kia, Mercedes, etc., take their profits back to their home countries, whether Japan, Germany, or South Korea, and they usually get preferential state tax treatment here for having an assembly plant here.
The domestic companies, Ford, Chrysler, GM, etc., all take their profits back to the United States, where they are taxed twice. First, they are taxed at the highest corporate tax rate in the world. The profits are then taxed a second time, whenever stock dividends are paid to shareholders. Dividends are taxed at the rate of the last dollar into your taxes, the highest.
And it's such a deal to manufacture in Mexico. Were it not for the cheaper labor rates, it wouldn't be worth the hassle to deal with the Mexican government. Their own people fear the tax authorities there, much worse than the banditos in the hills.
Dennis