GM CEO Pushes for Share of Federal Bailout Pie, More Banks Line Up

Those who do not study history, it’s said, are condemned to repeat it, which suggests that the Big Three automakers’ libraries might have gathered a thick layer of dust. It was just about 29 years ago that the legendary Lee Iacocca (remember those patterned shirts with the white collars?), then CEO of Chrysler, approached Congress to ask for about $1.5 billion in loan guarantees. Congress eventually agreed, and then-President Carter signed the legislation into law in January 1980. The action, essentially unprecedented at the time, worked in spades. The automaker, previously on the verge of bankruptcy, introduced some successful new car models and became a leader in the introduction of the minivan. Chrysler ended up paying off its loans ahead of schedule. We can only hope that the current version of this story turns out so well. General Motors Corp. CEO Rick Wagoner is pushing ever harder for federal aid to the largest U.S. automaker as it seeks a merger with Chrysler, whose majority owner is Cerberus Capital Management L.P. GM has lost nearly $70 billion over the past four years, and Chrysler too is losing money. The price tag of a bailout won’t be in 1970s dollars, though. Press reports based on sources who chose to remain anonymous indicate that the cost might hit $10 billion. Specific sources of help include a $25 billion low-interest loan fund administered by the U.S. Department of Energy that’s intended to help carmakers retool their plants, as well as–in theory–the $700 billion bailout pool that’s being tapped to aid troubled financial institutions. Another twist is that the automakers’ lending units might be eligible to get help under the Emergency Economic Stabilization Act of 2008, according to White House press secretary Dana Perino. Cerberus Capital Management has been the majority owner of GMAC since 2006. Meanwhile, more of the original targets of the EESA are lining up for their share of federal rescue money. According to USA Today, at least 16 regional banks will be included in the second phase of the Treasury Department’s purchases of preferred shares in financial institutions. The banks are: * PNC Financial Services, Pittsburgh, $7.7 billion * Capital One Financial, McLean, Va., $3.55 billion * Regions Financial, Birmingham, Ala., $3.5 billion * SunTrust Banks, Atlanta, $3.5 billion * BB&T, Winston-Salem, N.C., $3.1 billion * KeyCorp, Cleveland, $2.5 billion * Comerica, Dallas, $2.25 billion * State Street, Boston, $2.0 billion * Northern Trust, Chicago, $1.5 billion * Huntington Bancshares, Columbus, Ohio, $1.4 billion * First Horizon National, Memphis, $866 million * City National, Beverly Hills, Calif., $395 million * Valley National, Wayne, N.J., $330 million * UCBH Holdings/United Commercial Bank, San Francisco, $298 million * Washington Federal, Seattle, $200 million * First Niagara Financial, Lockport, N.Y., $186 million