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Big three ask for bailout

Tuesday, August 26, 2008, 1:05 PM

Automakers seek $50 billion in fed loans

WASHINGTON -- Detroit's Big Three automakers are
planning an aggressive push on Capitol Hill as they seek up to $50
billion in low-cost loans to speed the development and production of
more fuel-efficient vehicles.

General Motors Corp., Ford Motor
Co. and Chrysler LLC would use the money to help pay for retooling of
older assembly plants and developing advanced technologies.

This is
simply a request for a bailout by the automakers. I know they’ve
wrapped it in other language such as “retool to make more fuel
efficient vehicles,” but the truth is that any money they receive will
disappear into the black holes that reside at the center of each
company. Besides the fact that they really should not have been caught
unawares again, I think that GM, Ford, and Chrysler should provide
clear plans for how they intend to return to profitability using
taxpayer money. So far they’ve displayed horrible management skills,
and it is not clear to me that the best use of taxpayer money is with
these companies.

Instead, I wonder what $50 billion could do
the dozens of start-up electric vehicle companies out there? Sometimes
companies are just too sclerotic to get out of their own way, and a
fresh start is the best option.

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