Detroit Automakers Bailout

Although the American automakers get a lot of bad rap for not producing better, smaller, quality cars than Japanese or other foreign automakers, I think Ford and GM have gotten their act together in the recent years. Their bad image, (in my opinion) results from their past mistakes, which I believe they are on their way to rectify it. I don't know the future of Chrysler, but Ford and GM in my opinion have made enough strides in building quality cars.

I am not sure if the bailout bill will pass this lame duck session as the Bush Administration and the Treasury are strongly opposed to using any money from the $700 billion bailout of the financial industry. The Bush administration instead wants the automakers to use the existing $25 billion loan that was sanctioned by Congress to retool the Big 3 manufacturing plants. As Obama is supportive of additional bailout of Detroit automakers, it is safe to say that the bill will pass, if not in this session, the next session when the new congress meets.

I am worried that if GM or any of the 3 auto makers go bankrupt, it might brew a situation like AIG and bring down a larger part of American economy with it, and make already worse situation catastrophic. In such a situation, I would rather bailout these companies than face a possible severe recession or even a depression. The economy is in gutters already, and I am not sure how much more beating the American economy can take.

I do agree with some of the concerns that bailing out auto
manufacturers would lead to other industries requesting handouts from the government
(especially the airline industry). Also, by bailing them out, the car
manufacturers wouldn't learn their mistakes; instead they might be under the assumption
that even if they made disastrous decisions, the American taxpayer would bail
them out of their mess - that would certainly not be a good outcome.
Unfortunately, we have to pick a lesser of two evils, I would rather bailout
out these companies than face a significant, longer downturn in the economy.

I would nonetheless like the Congress to have significant preconditions for the bailout, including focusing on building fuel efficient cars, and vehicles with alternative fuels. Chevy Volt is a good example of the direction, American automakers should go. New vehicles like Volt would definitely be small step in the direction that would make US energy independent.

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