Leaders Sing 'Hallelujah' For $17.4B Bailout

"I think it's pretty big news," says Fred Liesveld, managing director of the Detroit office of Grubb & Ellis. "I think there's still a feeling of wait-and-see, but it helps put a sense of stability in the marketplace. We hadn't been able to plan anything; we've had more than five auto-related deals that were mostly on hold, there's just been a paralysis in the Detroit area. Some if not all of those deals, I think, will be able to get back on track."

Pres. George W. Bush agreed to fund the bailout loan with TARP funds, with a plan similar to those debated by Congress in the past few weeks. Conditions of the loan include some federal investment into the two companies, making the firms and the United Auto Workers find a way to match salaries with foreign firms doing business here, and comprehensive plan to "show that their firms can earn a profit and achieve a positive net worth," said the President in a statement this morning.

General Motors CEO Rick Wagoner, whose job was in question during the bailout negotiations, told reporters during a press conference this morning that he believes it will be possible to meet the government's requirements. "We think we can bring this company out as a viable company," he said.

Company officials said in a statement that the bailout will help preserve many jobs and support the continued operation of the company, suppliers, dealers and small businesses. However, GM still plans on pushing back on production in many plants, and even postponing new construction, such as for the new Flint plant that was to build engines for the Chevy Volt. "We're putting the plant on a temporary hold," a spokeswoman tells GlobeSt.com. "The price of steel has gone up, and we want to be sure we can fund procurements needed to finish the construction." The bailout deal also includes the stipulation that GM and Chrysler talk with the Fed about any new transaction more than $100 million.

Chrysler also plans to continue its production slowdown, including the plan released this week to halt production at all plants until mid-January. More than 5,600 salaried workers took buyout options offered at the company in the recent weeks, a company source tells GlobeSt.com. In a statement today, CEO Robert Nardelli said that the firm is still focused on launching 24 new vehicles from 2009 through 2012, though GlobeSt.com's source says the firm has now massively cut back on new vehicle designs.

Liesveld tells GlobeSt.com that this bailout should be an important first step to bring activity back to the Detroit area. He says his firm just did a closing on an auto supplier buying a 110,000-square-foot industrial plant in Farmington Hills for less than $5 million. "It's a cheap price, but at least it's someone who needs a building," he says.