JUNE 5, 2009 (Washington, D.C.) - The Obama Administration announced today that the Federal Government will bail out American Motors Corporation. A long standing U.S. based automaker, AMC produced popular models such as the Rambler, Gremlin, and Hornet. AMC was known for using innovative strategies to challenge the Big Three U.S. auto manufacturers, including the early pioneering of battery technology for electric cars. However, the company fell on hard times and ran out of cash. The Obama Administration announced that the bailout was necessary in order to save thousands of jobs and continue to revive the domestic auto industry.
According to the plan, the Government will take a 60% stake in AMC, with the UAW taking 38% and bondholders receiving the remaining 2%. The Government believes that AMC can be revived with the introduction of the Gremlin Hybrid in 2011 (see sketch of concept car).
Critics of the plan point out that AMC actually ran out of cash in 1988, when its Jeep and Eagle models were absorbed by Chrysler, suggesting that the bailout is both unnecessary and belated. They further note that AMC’s main plant is located in Wisconsin, an electoral swing state.
According to the plan, the Government will take a 60% stake in AMC, with the UAW taking 38% and bondholders receiving the remaining 2%. The Government believes that AMC can be revived with the introduction of the Gremlin Hybrid in 2011 (see sketch of concept car).
Critics of the plan point out that AMC actually ran out of cash in 1988, when its Jeep and Eagle models were absorbed by Chrysler, suggesting that the bailout is both unnecessary and belated. They further note that AMC’s main plant is located in Wisconsin, an electoral swing state.
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