Released: October 28, 2008

Coming to Detroit’s rescue?

Source: Kendra Marr & David Cho, Washington Post (Free Registration)

The Bush administration is in negotiations to broaden its $700 billion financial rescue plan to include U.S. auto companies, potentially opening the door to an array of industries to seek federal aid.

Detroit’s Big Three are eligible for aid under a broad interpretation of the law that authorized the $700 billion financial rescue, Treasury Department officials said yesterday. But they declined to discuss the details of any assistance.

Ford and General Motors are eligible because they are both chartered as thrift holding companies, so they can establish banks to make car loans nationwide. Other businesses, such as General Electric, Nordstrom, John Deere and Macy’s, are chartered in the same way to issue credit cards or make loans to their customers. Chrysler would also be eligible, Treasury officials said.

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