Moultrie Observer

Local News

December 16, 2008

Chambliss prefers a structured bankruptcy plan

MOULTRIE — A structured bankruptcy would be the best way to save the nation’s embattled automakers, U.S. Sen. Saxby Chambliss said Tuesday.

Chambliss, R-Ga., discussed the failed loan package that tanked last week when by a 52-35 vote the Senate failed to bring up for consideration a $14 billion loan package for U.S. automakers. Earlier Chambliss addressed a joint meeting of Kiwanis and Rotary Club members at Sunset Country Club.

“I am opposed to giving these companies money for the single reason the business model under which they operate is in trouble,” Chambliss, one of 32 Republicans who voted against ending debate on legislation, said during an interview following the Tuesday program. “Until they go through internal restructuring (they are) not going to be able to pay us back.”

Chambliss said that automakers’ creditors were willing to make concessions, and management of the companies was willing to restructure but that the automakers’ union was unwilling to make concessions.

“I think some sort of pre-structured Chapter 11 (bankruptcy) would be ideal for the manufacturers,” Chambliss said. “The people I’m concerned about are the dealers.”

A better use of the millions of dollars would be freeing up credit for people to purchase autos, Chambliss said.

“Credit is a major issue,” he said. “The credit sort of constricted to the point where people can’t get loans to buy cars.”

A United Auto Workers spokesman did not return a call Tuesday seeking comment.

The $700 financial package passed by Congress has helped somewhat in loosening credit, he said.

Tight credit also could be a problem for farmers next year as they get ready to plant crops, Chambliss said. The farm bill written this year should help give banks confidence that farmers can repay loans, and the Farm Credit Service also will be able to extend loans.

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