There should be no bailout for automakers. Before we get too far into this, our love affair is with cars*, not the makers. Their short-sighted motives for high-profit (and low fuel economy) vehicles have created a mess that they themselves are responsible for and we see no reason to foot the bill.
For years Detroit shrugged off suggestions that fuel economy rules were unfair and so they put no serious money into research and development of newer technologies that would help with fuel economy. This sounds so familiar... Oh, safety!
And understand this: It will not turn out to be a loan.
What should happen:
- The government should say no and tell them to get their loans elsewhere.
What will probably happen:
- Congress will pony up the loans
- CEOs will not be canned (they should be)
- Unions will take a larger portion of the blame than they should
- China will come in with big investments to one of the Detroit Three
It's funny that once this depression (it will be labeled a depression before long) subsides, unions will have been fully busted (as a relic of the past and as part of the problem) but folks will need them more than ever before.
No one could have predicted these horrible sales were going to happen.
NY Times: Frank Sees ‘Disaster’ if Auto Industry Fails
McClatchy DC: No commitment on auto bailout despite union concessions