Thursday, December 11, 2008
No Bailout For You!
It was just announced that the auto bailout package failed in the Senate. I love the Senate.
So now what happens? There is some rumblings that George W. Bush and the White House will consider using some of the TARP money to fund the bailout. Just like the banks, they will just give the money to the automakers with very little strings attached. Yeah, great idea, because that seems to be working for us. We are only down about 30% from when we started that program so clearly it is working.
I for one hope that does not happen, and not for the reasons you may think. Yes, I am not a fan of bailing out anyone. I think this is a horrible use of taxpayer money. But I am much more interested in just seeing the drama play out. How close are we really to a full collapse of the American Auto industry? Is it as dire as everyone is saying? I for one think everyone is being a little bit of a Chicken Little. I have no doubt that one of the Big three will fail. But I do not believe it will take down the other two. I do believe that Americans will still have an interest in buying an American car, so I think we will actually see a much stronger automaker emerge from the rubble because they will see significantly more demand coming from the customers of the failed automaker.
I expect to see GM fail. I expect this no matter what happens, even if the White House decides to give them enough money to run for the next year. I think Chrysler will continue to live on the brink, but I think they will survive. And I expect the winner in all of this to be Ford. What do you think will happen?