We Must Help Detroit (11/20/08)
I'm concerned about the financial condition of the big three automakers. I don't like the idea of bailout, or massive loans any more than the next guy. But I have to believe that if they fail it would be catastrophic to our country. And I don't use words like "catastrophic" lightly.
It's not clear to me what they will do with the $25 billion dollar loans they seek, and I don't think they know yet. But I can tell you this: If the domestic auto business fails, direct and indirect employment will drop by almost three million people, personal income will drop by 151 billion dollars, social security receipts will drop by 21 billon dollars, and personal income tax paid would drop by 25 billion dollars...annually.
Today, Ford and GM are building high quality vehicles equal to what Japan and Germany are putting on the road. That may not be the perception but it is the reality. Not all, but many, of the financial problems they face right now come from elements out of their control -- like the inability to secure credit for modernizing their plants, for customers trying to buy cars, and for dealers trying to finance inventory.
It may be tough to grant this bailout, but nothing like how tough it will be if the domestic automakers fail.
I'm Bill Lamb, and that's my...Point of View.