August 26, 2008

Domestic Autos $50B Loan

Around here the big news, besides the Hip Hop Mayor, is the domestic auto makers asking for Government back loans.

Just some facts to point out ...

$50 billion package being sought by friends of General Motors Corp., Ford Motor Co. and Chrysler LLC wouldn't be a bailout in the classic meaning of the term. Direct loans from the Treasury to automakers and their suppliers aren't the same thing as direct infusions of taxpayer cash (which can't be said about the expected bailouts of government-backed lenders Fannie Mae and Freddie Mac).

And everyone knows the Domestic Auto's have a history of actually paying back government loans (see Chrysler)

"Or one of us will fail, forcing the others into federal bankruptcy court. The falling dominos could destroy 70 years of union bargaining gains, gut communities, kill suppliers, expose as failures the (mostly) Democrats who stood as industry friends and saddle taxpayers with, oh, more than $100 billion in pension obligations that could get dumped on the Pension Benefit Guaranty Corp.

Not to mention the fact that the Japanese government has always subsidized their automotive industry including the $25 BILLION dollars it gave them to research and develop their hybrid vehicles.

But the absolute biggest thing to think about is this ....

a core industry that still accounts for one in seven jobs in the United States."

One in seven jobs in the entire United States has ties to the automotive industry. And if you don't think you will be effected just talked to the service industry in Michigan and ask them how their businesses are doing with so many people out of work.

Dentists aroud here are failing because that is one of the first out of pocket expenses that get cut. Dentists are getting rid of people in their offices or closing totally because business has dropped so much.

If the entire automotive industry failed it would send the country into a depression, of that I have no doubt.

Posted by Quality Weenie at August 26, 2008 10:48 AM | TrackBack