Loans should reassure car buyers

(NBC) - This bailout is actually a better deal for the car companies than the one rejected on the hill. More than $13 billion can go immediately to GM and to Chrysler. By February, the loans could total more than $17 billion, all from the Wall Street bailout fund. President Bush said he had no choice.

"In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action," said Bush.

Car dealers hope car buyers are reassured.

"Chrysler, General Motors and Ford...they're all back in the market with plenty of financing available," said Tammy Darvish, president of Darcars Chrysler.

GM bosses are smiling.

"It's really a blueprint for a new General Motors, one for our second 100 years," said Rick Wagoner, CEO of GM.

CEO salaries and stock dividends will be slashed. Union autoworkers, suppliers, even bondholders have to agree to sacrifices. The carmakers have to commit to greener cars that buyers want or no more bailout loans.

"The time to make the hard decisions to become viable is now or the only option will be bankruptcy," said Bush.

The next president agrees that America's patience is running out.

"The auto companies must not squander this chance to reform bad management practices," said Barack Obama.

Critics are outraged. The Bush bailout does not set binding targets for Detroit.

"You have got to have assurances that there's a beginning and an end and that the necessary reforms for the way these companies operate are written in stone," said Larry Kudlow, CNBC analyst.

That will have to wait until March when GM and Chrysler have to present their survival plans: To get more bailout billions.