Bailout breakdown: Banks vs. the automakers

Monday, February 9, 2009

Bailout breakdown: Banks vs. the automakers

Automakers get 8 percent of federal aid, but it comes with more conditions

Brian J. O’Connor and Tim Summers / The Detroit News

More than $305 billion in federal bailout cash has been OK’d by the Treasury Department as of Feb 2. Where did it go? Eighty-five percent went to Citigroup and two dozen other big institutions. Detroit’s automakers got a mere 8 percent of the money, while only five Michigan banks have taken bailout bucks.

BANKS

25 banks and institutions have received $259.2 billion.

Another 336 banks have received an average of $63 million each, totaling $21.17 billion.

43 states have institutions receiving bailout money.

The most: $50 billion

The least: $1 million in preferred stock warrants

MICHIGAN BANKS:

$300 million: Citizens Republic Bancorp Inc. of Flint

$266.7 million: Flagstar Bancorp Inc. of Troy

$72 million: Independent Bank Corp. of Ionia

$20.6 million: United Bancorp Inc. of Tecumseh

$33 million: Firstbank Corp. of Alma

STIPULATIONS FOR BANKS

• Incentives for senior executives can’t "encourage unnecessary and excessive risks."

• Bonuses or incentives earned because of inaccurate statements of earnings or gains can be taken back.

• No "golden parachutes" for bankers who resign or are fired

• Can’t deduct from corporate taxes more than $500,000 in salary for each senior executive

Note: Figures do not include loan guarantees, such as the one made to Bank of America where the U.S. agreed to protect BofA against further losses on $118 billion in capital markets exposure, mainly linked to the bank’s acquisition of Merrill Lynch. BofA will cover the first $10 billion in losses and the government will cover 90 percent of any subsequent losses.

Sources: U.S. Treasury Department, Associated Press

AUTOMAKERS

$19.3 billion: General Motors Corp.

$5.5 billion: Chrysler Holding LLC

STIPULATIONS FOR AUTOMAKERS

• All of those that apply to banks, plus:

• No bonuses or incentives of any kind to the 25 highest-paid executives

• Must sell or end leases on corporate planes

• Can’t sell assets, make big purchases or other "material transactions" without government approval

• Spending is restricted or banned on several items: travel, sponsorships, consultants, real estate, office renovations and holiday parties.

• Must submit restructuring plans to government by Feb. 17

• Must restructure hourly wages and work rules to match Japanese competitors doing business in the U.S.

• Eliminate payments of compensation and benefits to former employees,including "idled" workers in the jobs banks

• Half of payments to union health care trust must be in stock, not cash

• Must file progress reports on restructuring plan by March 31

• Must file a range of weekly, biweekly and monthly status reports on cash forecast, liquidity, expenses and benefit plans

Note: GM total includes an additional $4 billion loan still contingent on Treasury approval. Amount automakers received includes financing arms GMAC and Chrysler Financial.

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