The Original Bailout Terms:
Viability Requirement: The firms must use these funds to become financially viable. Taxpayers will not be asked to provide financing for firms that do not become viable. If the firms have not attained viability by March 31, 2009, the loan will be called and all funds returned to the Treasury.
Definition of Viability: A firm will only be deemed viable if it has a positive net present value, taking into account all current and future costs, and can fully repay the government loan.
Binding Terms and Conditions: The binding terms and conditions established by the Treasury will mirror those that were voted favorably by a majority of both Houses of Congress, including:
-Firms must provide warrants for non-voting stock
-Firms must accept limits on executive compensation and eliminate perks such as corporate jets
-Debt owed to the government would be senior to other debts, to the extent permitted by law
-Firms must allow the government to examine their books and records
-Firms must report and the government has the power to block any large transactions (> $100 M)
-Firms must comply with applicable Federal fuel efficiency and emissions requirements
-Firms must not issue new dividends while they owe government debt
Targets: The terms and conditions established by Treasury will include additional targets that were the subject of Congressional negotiations but did not come to a vote, including:
-Reduce debts by 2/3 via a debt for equity exchange
-Make one-half of VEBA payments in the form of stock
-Eliminate the jobs bank
-Work rules that are competitive with transplant auto manufacturers by 12/31/09
-Wages that are competitive with those of transplant auto manufacturers by 12/31/09
These terms and conditions would be non-binding in the sense that negotiations can deviate from the quantitative targets above, providing that the firm reports the reasons for these deviations and makes the business case to achieve long-term viability in spite of the deviations.
In addition, the firm will be required to conclude new agreements with its other major stakeholders, including dealers and suppliers, by March 31, 2009.
[thanks to windswords for the link]
Thanks to all involved for reminding us of the particulars. Unfortunately it may as well have been written in invisible and promptly thrown into a fire. The viability of these companies is not what our government is considering. Rather, they are focused on: What is most politically advantageous to our side? and What can we get away with?
(and, NO, this has nothing to do with the Dems or the Republicans (or is it the Limbaughs nowadays?)Both parties are morally bankrupt when it comes to doling out taxpayer money.
“These terms and conditions would be non-binding in the sense that negotiations can deviate from the quantitative targets above, providing that the firm reports the reasons for these deviations and makes the business case to achieve long-term viability in spite of the deviations.”
Wunderbar! If you can’t do it, that’s okay, just make sure to ask for more money because you are vital to the economy. Is this country great or what!
Marcus pretty much hit it on the head.
The first paragraph about viability requirements would have you believe there’s no way in hell they’re going to continue to get money, but then you read the second-to-last paragraph and all the rules laid down before it instantly fly out the window.
Politics as usual, I suppose.
Wow, I’m humbled. But it’s windswords with a ‘d’. 5 points for anyone who knows what it refers to. (hint: It’s an American television sci-fi series reference.)
windswords
Text amended. No clue.
From
http://babylon5.wikia.com/wiki/Wind_Swords
The Wind Swords are a Minbari warrior clan. They were amongst the most radical in Minbari society.
In ancient times, the Wind Swords were a mounted force probably with an emphasis on sword fighting.
The Wind Swords are the most militant of all the warrior clans and jingoistic to the point that they will do anything to defend their world, even bypassing the circles of authority.
Mentioned in the season 1 episode “Deathwalker”.