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Zandi warns automaker bailout will cost far more than $34 billion

The chief economist of Moody's testified before a Senate committee that a federal rescue will require $75 billion to $125 billion.

If anyone feels like shouting "mission accomplished" should the Detroit automakers win their $34 billion financial rescue, it won't be Mark Zandi.

The chief economist at West Chester's Moody's testified before the Senate Banking Committee yesterday and recommended that the federal government provide help to the automakers.

But $34 billion won't be enough. He estimates the Big Three would need $75 billion to $125 billion to avoid bankruptcy in the next two years.

Zandi comes to that conclusion based on their long-term slide in market share to about 47 percent and by projecting a weak recovery for U.S. vehicle sales.

If General Motors, Ford and Chrysler can rebound to control 50 percent of the U.S. market, a federal rescue could cost $75 billion, Zandi calculates. But if their market share falls to 40 percent, it's going to cost more like $125 billion.

MedQuist twist

When MedQuist Inc. settled allegations just before Thanksgiving that it had overbilled federal agencies for its medical-transcription services, the Mount Laurel company agreed to pay the U.S. government $6.6 million.

The allegations stemmed from whistleblower lawsuits brought by two former MedQuist employees several years ago: Christopher Foley, a regional vice president, and Susan Purdue, a computer systems administrator in its Asheville, N.C. office.

In a filing with the Securities and Exchange Commission, MedQuist says that the U.S. will pay Foley $450,000 and Purdue $144,000 under the settlement.

Foley is currently president of CBaySystems & Services Inc., a medical transcription firm owned by CBaySystems Holdings Ltd. Never heard of it? MedQuist has.

CBaySystems bought a 69.5 percent stake in MedQuist from Koninklijke Philips Electronics N.V. for $287 million in August.