Tuesday, December 2, 2008

Big 3 Back in Washington

The Big 3 automakers are back in Washington DC asking for money. Their request could have far-reaching implications. If Congress awards the tens of billions the automakers want, they could use that money to pay thousands of auto industry workers, thus stimulating the American economy.

But do we know for certain that's where the money will go?

Rumors are circulating that American automakers are intending to spend billions in overseas markets. Do we want American taxpayer money supporting the economies of other nations? Before our lawmakers even consider giving out any money, we need assurances that this bailout will be spent to improve the American economy and to create jobs for Americans.

$25 billion is a lot of money. You could start up a whole new auto business for that kind of change.

If we are to invest billions in loans to these companies, we need to see an improved business model. We need to be shown where the Big 3 have gone wrong, and how they intend to change and improve themselves.

How do we know that GM, Chrysler and Ford won't just use this money to buy more million dollar commercials? Have you seen some of these commercials? They have major motion picture production value. There are explosions, special effects and computer generated graphics that no doubt cost a fortune. Wouldn't that money be better spent on R&D?

If GM, Ford and Chrysler are in financial trouble, it's not because the government doesn't give them money, it's because they have a failed business model. If they're not responsible enough to keep the oldest and most respected auto companies in the world profitable, it's doubtful they are capable of managing a multi-billion dollar bailout package.

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