Transcripts

The Auto Industry is Looking for a Bailout

SUSIE GHARIB: Pressure is mounting tonight for Uncle Sam to help the nation's struggling auto makers. The governors of six states asked the Federal government today to throw the "big three" a lifeline, saying problems at General Motors, Ford and Chrysler threaten to become an unmanageable disaster. The leaders of Michigan, Delaware, Kentucky, New York, Ohio and South Dakota sent a letter to Treasury Secretary Paulson and Federal Reserve Chairman Bernanke urging immediate action for the troubled auto makers. The governors say letting the companies fail could put at risk the financial wellbeing of other major industries and millions of Americans. GM and Chrysler are contemplating a merger, but there's a long way to go before it's a done deal. Analysts tell NIGHTLY BUSINESS REPORT that financing is the biggest hurdle, which is why GM is lobbying for Federal money to help buy Chrysler. We're also told GM needs Chrysler's mini-van and Jeep brands. Consulting firm Grant Thornton said if a merger happens, Chrysler owner Cerberus Capital Management would likely get half of GM's financing unit. It also predicts that only seven of Chrysler's 26 models will survive. Half of Chrysler's plants will be forced to shut down and 24,000 Chrysler workers would lose their jobs.