Automakers To Hit Congress Hard This Month For Loans That Aren't A Bailout

Illustration for article titled Automakers To Hit Congress Hard This Month For Loans That Arent A Bailout

After a nasty summer of sliding sales and eroding market share, domestic automakers are planning to lobby the US Congress for $50 billion in low-interest government loans. The companies claim the money would allow them to modernize plants and develop new fuel-efficient vehicles; ordinarily, automakers would have tapped existing lines of credit for the required cash, but rising interest rates combined with debt ratings reduced to junk status have rendered their options severely limited. But, the important thing to note here is that this is NOT a bailout. No sir. Jalopnik Snap Judgment: While we'd rather see the Detroit Three stay afloat on their own, government-backed low-interest loans, properly repaid in a timely fashion, seem to be about the next best option. Particularly when said loans are viewed in the light of subsidies and other assistance quietly offered to foreign automakers by their home governments. And, technically, these government loans would also be available to non-US manufacturers, though most are expected to decline the assistance. We do think that the automakers are going to have to be more honest about what they're asking for: Said Ford's Mark Fields, "This is not about benefiting Wall Street. This is benefiting Main Street, the working men and women. The auto industry is part of the backbone of the U.S. economy." We take issue with two of Fields' inferences: First, that Wall Street isn't part of the backbone of the US economy — it is, like it or not. And second, that a series of government-funded loans benefiting "Main Street" somehow isn't a bailout. It doesn't matter who reaps the benefits; if the gub'ment pumps a bunch of money into an industry to keep it afloat despite market conditions, it's a bailout. [Yahoo; Photo: Markfive]


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@danio: I'm sorry, that's socialism and a path to economic doom.

Throw away the money of people that do what it takes to support themselves and their families. Throw away the resources of companies that create jobs. Give it all to companies that wouldn't otherwise be in business (and are losing jobs). Give it to people that wouldn't otherwise have a job.

I believe that's the society that every immigrant (including me) that came to the US (or Canada) was trying to escape. Let's reward innovation and success, not failure and lazy thinking.