Don’t Bail Out the Auto Industry - It Won’t Work
Obama is pushing for a $50 billion dollar bailout for the auto industry - it’s a mistake.
Many people have said they are in favor of an auto industry bailout, if Ford/GM/Chrysler promise to put the money toward developing electric/high mileage/green/small cars or retraining workers, or any number of other initiatives to change the industry.
You’re missing the point of the bailout. The reason these companies need a bailout is because they are insolvent. They owe more money than they have. Their business models are broken.
Any bailout money they receive is already spoken for - it will go to meet their obligations to creditors - their suppliers, their grossly overpaid unionized workers, upkeep for their plants, subsidies to dealers, etc. The bailout money is needed in order to pay these organizations so the companies are not forced into bankruptcy. It will not, cannot, go toward any “green” initiatives.
Giving the Big 3 a bailout will do nothing to change their business models. They will still be burning cash at an alarming rate, building the same vehicles nobody wants, and operating under a crippling cost structure.
These inefficient and already heavily subsidized companies need to fail. They are a leech on our economy. Bail them out now, and you can bet we’ll see them again in a year, hat in hand, like a junkie asking for another hit.
