The Auto Industry’s 15 Billion Point Turn

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Below is a guest blog entry by Nomi Prins:

Perhaps jarred by the November unemployment report, Congress offered a $15 billion olive branch to the Detroit Three Friday night. (Note: You can keep calling them the Big Three if you want, but it’s a bit of a misnomer these days, isn’t it?)

The loan, stressed House Leader Nancy Pelosi (D-CA), will provide “short-term and limited assistance” to the D-3, though there is some ambiguity about what she meant. She also promised the money would be repaid “within a matter of weeks.” But given the absence of inventory movement, and lack of cash flowing through the D-3’s books, it’s not clear exactly how that’s going to happen.

Nonetheless, this loan will allegedly keep the auto industry on a ventilator until March, when the Obama administration and new Congress can take another pass at determining what to do. Until that point, the auto-execs will supposedly go about executing their multi-hundred page restructuring plans. Will they address the core problems that plague the auto industry? Let’s hope.

—Nomi Prins

Nomi Prins is a former Wall Streeter and frequent contributor to Mother Jones.

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WE'LL BE BLUNT

It is astonishingly hard keeping a newsroom afloat these days, and we need to raise $253,000 in online donations quickly, by October 7.

The short of it: Last year, we had to cut $1 million from our budget so we could have any chance of breaking even by the time our fiscal year ended in June. And despite a huge rally from so many of you leading up to the deadline, we still came up a bit short on the whole. We canā€™t let that happen again. We have no wiggle room to begin with, and now we have a hole to dig out of.

Readers also told us to just give it to you straight when we need to ask for your support, and seeing how matter-of-factly explaining our inner workings, our challenges and finances, can bring more of you in has been a real silver lining. So our online membership lead, Brian, lays it all out for you in his personal, insider account (that literally puts his skin in the game!) of how urgent things are right now.

The upshot: Being able to rally $253,000 in donations over these next few weeks is vitally important simply because it is the number that keeps us right on track, helping make sure we don't end up with a bigger gap than can be filled again, helping us avoid any significant (and knowable) cash-flow crunches for now. We used to be more nonchalant about coming up short this time of year, thinking we can make it by the time June rolls around. Not anymore.

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