Comment & Debate
“Gettelfinger on the case for auto bailout”. 26 Nov. 2008 – The Detroit-based Auto Companies Are Facing a Crisis. The net result is that all auto companies, not just the Detroit-based automakers, have seen a sharp drop in their sales. This means that the revenues received by the companies have declined drastically. As a result, GM, Ford and Chrysler are burning through their cash reserves at an unprecedented rate. As the recent earnings reports indicate, this scenario is not sustainable. If the government does not act to provide immediate assistance, GM, Ford and Chrysler could be forced to liquidate.
“Auto companies not to blame”. Saginaw News. 25 Nov. 2008 – the auto companies did not cause the near collapse of the real estate, mortgage, credit and financial markets. They had nothing to do with that. They have always borrowed money in the shorter term market to help finance research and design of new models, building new plants to produce them and re-tooling existing plants to make their products.
The financial markets and Wall Street along with their bought and paid for U.S. senators caused this whole mess.
Regulatory representatives from the current administration even went to Congress in 2007 and requested some control be given them to get into this threatening area, but Congress refused. When the recent Congress passed the bailout for the banks and started giving them money, they kept the money instead of re-starting the credit flow, thus making it impossible for the auto companies to borrow the short-term funds they needed.
The auto companies did not cause any of this. I don’t know if the loans are the right answer, but the crooks in the U.S. Senate and on Wall Street caused this completely with their greed and lust for power.
Greg Chaney, Manager, Chacon Autos, Dallas-based owners of eight automotive dealerships said in a November 2008 article in Inc Magazine: “I believe that the U.S. auto industry needs some sort of help. There are quite a few things that have come together to create a perfect storm that could put them out of business.”[1]