Friday, December 19, 2008

Turning the Titanic - Kudos to George Bush on Interim Loan to Automakers

Kudos to George W. Bush for offering an interim loan to American automakers.

While there is plenty of reason to be angry with the short-sightedness of the Big Three, and there is a real temptation to let them fail for their poor management, there is just too much at stake - especially in this reeling economy - to allow them to do so. Bush is correct in stating that "[a]llowing the auto companies to collapse is not a responsible course of action"; that bankruptcy would deal "an unacceptably painful blow to hardworking Americans."

The $17.4 million of loans to GM and Chrysler (Ford doesn't need them at this time) appropriately comes with strings attached - the companies must come up with viable restructuring plans by March 31 or the loans will be called. "The time to make hard decisions to become viable is now, or the only option will be bankruptcy," Bush said. "The automakers and unions must understand what is at stake and make hard decisions necessary to reform."

We'll see - is Detroit capable of turning the Titanic?