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Monday, November 17, 2008 Granholm Says US Auto Companies Can Not Recover From Bankruptcy
LANSING - The idea that the domestic auto companies could recover if they are forced to file for bankruptcy protection is "baloney," Governor Jennifer Granholm said Monday in national television interview. Customers worrying about warranties and long-term service are not likely to buy a car from a company in bankruptcy, Granholm said in an interview over the cable network MSNBC. Granholm made her comments the same day the trade publication Automotive News ran a front-page editorial warning that if General Motors is forced to file for Chapter 11 bankruptcy protection that it will actually undergo liquidation within a short period of time. Granholm was interviewed as she was in Israel as part of a trade mission for the state. In recent weeks, Granholm has become possibly the most public face nationally in urging that Congress approve a loan for the domestic auto industry to help it meet immediate cash needs. The U.S. Senate was to begin a debate on the issue on Monday, and President George W. Bush has indicated that he does not support granting any part of the $700 billion bailout recently approved for the financial industry, but that the $25 billion in loans recently approved to help the industry retool its factories should be accelerated. Granholm rejected the idea raised by some commentators that both the industry and the UAW have not done enough to fix their own situation, saying that the auto industry has been involved in restructuring for some eight years and that the new contract the UAW signed means major savings to the industry. That said, Granholm said with any agreement for assistance from Congress "there should be strings attached and there will be" on the industry and labor. The situation facing the Detroit-based auto industry is not unique to them, she said, as European car companies are also seeking help to the tune of some $56 billion from their governments. But she completely dismissed the idea that a car company could file for Chapter 11 and then re-emerge. "Who will buy a car from a company that has gone bankrupt?" she asked. Consumers making such a large purchase have to have confidence that their warranties will be honored, she said, and that they can get service in the long term. The U.S. economy cannot fully recover and transform itself without a solid auto industry and manufacturing sector, she said. Granholm's office has said she will continue to communicate with congressional members to try to win support for an aid package for the auto industry. This story was provided by Gongwer News Service. To subscribe, click on Gongwer.Com
Author: Staff Writer Source: Gongwer News Service
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