Chrysler Corporation Loan Guarantee Act of 1979 : Background, Provisions, and Cost (R40005) / James M. Bickley.

Format:

Book

Author/Creator:

Bickley, James M., author.

Series:

CRS report for Congress, R40005.

CRS report for Congress, R40005

Language:

English

Subjects (All):

Economic assistance, Domestic.

Physical Description:

1 online resource (7 pages).

Place of Publication:

Washington, D.C. : Congressional Research Service, Library of Congress, 2008.

Summary:

A look at how the Chrysler Loan Guarantee Act of 1979 affected TARP funding for the Detroit Big Three.

The American automobile industry has serious financial problems. Corporate executives from the Big Three (General Motors, Ford, and Chrysler) have testified before Congress about their need for federal credit (direct loans and guaranteed loans). This report examines the Chrysler loan guarantee program for possible insights that could assist Members of Congress in evaluating proposals to provide federal credit assistance. In 1979, Chrysler applied for federal loan guarantees. In 1979 and 1980, the economy was in recession and the price of oil had unexpectedly increased dramatically. However, at that time there was no financial liquidity crisis, as is the case today. Most of the arguments for and against the proposed Chrysler loan guarantee program are relevant to current proposals for credit assistance to the Big Three. For example, in the 1979 debate, proponents argued that the Chrysler loan guarantee would save many jobs. But opponents contended that the financial capital obtained for Chrysler by the proposed loan guarantee would have been used by other firms to expand their productive facilities, output, and employment. Thus, any Chrysler job losses could be offset by gains at other firms.

Notes:

Description based on publisher supplied metadata and other sources.