A senior US government official said an auto industry bailout was being put together as quickly and carefully as possible while a new ratings report showed bankruptcy was the most likely way the industry would be restructured.

Go deeper with GlobalData

Data Insights

The gold standard of business intelligence.

Find out more

Related Company Profiles

View all

“The automakers will get the money as quickly as we can prudently do it,” Paulson said in interview on CNBC television, according to Reuters. “We need to do this, but we need to do it right.


President Bush had earlier told CNN the US was in “a huge recession” and that he did not want to worsen the economy with an automaker collapse.


“On the other hand, I’m mindful of not putting good money after bad,” Bush said. “So we’re working through options.”


His administration has come under renewed pressure from fellow Republicans who want the government to demand tougher concessions from labour and other groups than Democrats and the White House previously agreed were needed to qualify for aid.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

The administration has previously hinted it might use part of the US$700bn financial services bailout fund to help the automakers.


According to Reuters, a report by Moody’s Investors Service said on Tuesday that government help paired with ‘pre-packaged’ bankruptcy was the industry’s most likely restructuring scenario.


The report said that without such a bankruptcy – when concessions and financing are arranged before a court filing – the automakers were headed for a “freefall” bankruptcy that would trigger a rise in US unemployment.


Moody’s was reported to have said there was about a 70% chance of a prepackaged bankruptcy coupled with government assistance, and just a 25% chance of a government bailout without a bankruptcy.