Financial journalists, most of whom spend more time writing about derivatives than carburetors, have been scathing about the possibility of an auto industry bailout, even though they’ve happily accepted multiple bailouts for the financial sector.
Currencies rally then fall back… Rate slashers! Following Japan? Let’s hope not! Canada’s woes mount…
And Now… Today’s Pfennig!
The labor situation has become so dire that you can now hire an American Blue Chip CEO for a dollar – and a ride to work.
The private jets were the last straw. I speak of the chosen mode of transportation for the “Big Three” automaker CEOs last week. When the heads of GM, Ford and Chrysler made their trek to Washington, they did so in the style of fat cats. They should have flown coach.
Perhaps I am being too optimistic, but I think the government bailout of the Detroit 3 is a foregone conclusion. In the interest of the entire country and the national economy, the government simply can’t let the automakers fail. There is no denying the business model is broken, but hopefully steps will be taken to change that.
The UAW holds the key to the success of the U.S. auto industry. The recent Senate hearing with the CEOs of the big three car manufacturers was better than most sitcoms. The CEOs were unable to answer questions about how they plan to pay back the loans, or just avoided the question, or how long the loans would keep them afloat, or how they would change their business models to avoid asking the taxpayers to bail them out again. It went on and on.
Congress now tells us that it has put off a vote on any Detroit bailout until after Thanksgiving. It warns the Big Three that it had better come up with a viable plan to use the money to get back on track or the check will not be written.
America’s two leading auto manufacturers, Ford Motor Co. (F) and General Motors Corp. (GM), reported heavy third-quarter losses Friday and are under a severe liquidity strain. Both are seeking emergency loans from governments in the United States and Europe.